The World championships have 16 teams, and there rarely are absolute spankings (meaning 10+ goal difference). While best on best the gap would obviously widen, looking at the IIHF rankings I think you could go to around that 16-20 teams without it getting too ridiculous aside from a couple of possible blow out games. After ~20 teams it would get a bit silly, so 32 teams is too much for hockey.8-12 is pretty much the max, unless you prefer to see some absolute spankings by the top teams