you are mostly correct, in overall terms yes market cap is the...

you are mostly correct, in overall terms yes market cap is the driver on whether the company is doing better or worse. 

the issue some people have with SOI is that a company with a large amount of SOI will have had many cap raises to get to that amount of SOI's and that generally is not good for the small shareholder as they may not have the cash to participate (or even worse not even get considered to participate) which will dilute their holding and effectively reduces their hand. with lots of SOI's that has probably happened a number of times (read the company has not been successful at creating a revenue stream or is wasteful of potential revenue) and is probably more likely to raise cap in the same manner in the future (particularly in spec metal stocks where if they want to make money the need to build a mine which has quite a large initial outlay) 

secondly lots of SOI's mean that the big boys can play games with the price in the short term to suit them. In your example if you had 10,000 shares a big boy may be willing to sell 10 or 100 or even a 1000 of their shares at a slightly lower price if it means they can buy 20 or 200 or 2000 more at that price to make a slightly bigger percentage gain in the long term even if it means that the market cap never reaches the same highs it would have if left "unplayed" the big boys will make a bigger profit as they can play the market. having more shares on issue makes it easier for those games to be played.

large SOI's can (not necessarily will but definitely can) stop companies running as hard as they would with smaller SOI's after a break out or good news because large SOI means FOMO is less (more SOI's more possibility of getting some) even if they are tightly held more SOI's means availability of them is greater so FOMO wont be as bad