I can't disagree more with the previous posts on this subject. We know full well what happens when your regional Pokédex is too small because we've seen it numerous times both by Gamefreak and by hackers emulating them like Doesnt.
Hoenn had a regional Pokédex of about 200. The result: Phoebe's team consisted of Banette and Dusclops and nothing else, and Glacia was using Glalie and unevolved Sealeo. Sinnoh (Diamond and Pearl, specifically) had a regional Pokédex of 151. The result: some trainers weren't even able to have full teams of their type. Candice had a Medicham (and an unevolved Snover); Volkner had an Octillery and an Ambipom; Aaron had a Drapion (and a Beautifly and Dustox); Flint had a Steelix, a Lopunny and a Drifblim.
Given that a minute Pokédex hampers your player's enjoyment (I don't know anyone who hasn't praised the amount of variety in the expanded Unovadex and Kalosdex) as well as your ability to craft threatening opponents as a game designer, I can't imagine why you'd ever go with a regional Pokédex as small as those used in vanilla Gen III. e: Though I also agree that going all the way to 721 is dumb - implementing all those Pokémon would be exhausting. 386 is a good 'dex size, in my opinion, and conveniently it's the number of slots in the game without expanding anything.