Litecoin, Dash, and other bitcoin forks have taken this approach. There are a few issues which are not immediately obvious.
The big one though:
Increased Data storage and transmission costs
Although 1mb per ten minutes sounds very low, increasing that amount to 2-4 mb will prevent some very slow internet connections from being able to ever sync.
Today, the slowest internet available worldwide seems to be about 256kbps
If you wanted to, you could run a full bitcoin node on this wifi, though the initial sync would take a while. at 256kbps, or about 900mb/hour, syncing the blockchain would take about 250 hours, or 10 days.
This is the key to bitcoin's relatively small block sizes: Even with this slow connection, it only takes 10 days to fully
validate every transaction that has taken place in the last 10 years
Perhaps more importantly, a full day of 1mb blocks would take 576 seconds, or just under 10 minutes. This means that, daily, a person in a remote area with no internet connection, could come into town, sync the blockchain on very slow internet, participate in the local economy, all the while never needing to rely on any 3rd party to hold or verify their money. This allows the bitcoin blockchain to achieve a level of decentralization that many other blockchains lack.
Keep in mind that doubling the block size of the blockchain will not just double the time it takes to sync the blockchain, but rather more than double it, because the blockchain will be growing faster while you are syncing.
Increased orphan rate
Miners will have their blocks orphaned more often. This creates the incentive to join larger mining pools, since the larger a mining pool, the more miners will start mining on your block, rather than mining on a competing block at the same block height. This is much worse with larger blocks, rather than more frequent blocks, but either way, there is a point at which this increased benefit is not a trivial difference. Once the network matures, if there is a significant advantage, we would expect the market to eventually tend toward that "solution", which would increase centralization
Decreased scarcity of on-chain data storage
The fact that there is only 1mb available in bitcoin per 10 minutes creates what is essentially a bidding war on that 1mb. Although this is bad for the medium of exchange property of bitcoin in the short run, it may prove to be a very important characteristic in the store of value property in the far distant future as block rewards go to zero, as we now extra value from rarity: storing data on Bitcoin.
The above were only theoretical, that is, assuming this idea was adopted, what system would result. In practice, the network would surely fork if such an event took place. If the past is any indication of the future, such a huge change would result in a (minority) fork, leaving bitcoin at 1mb and the fork at the changed size. Another part of what gives bitcoin its store of value property is that the underlying protocol is extremely change-resistant, and it is likely that it is "antifragile", that is, it is becoming more resistant to being changed/broken as attempts to change it have failed (see segwit2x, and numerous forks).