When playing 3E, our group uses the house rule that escape artist ranks add to the grapple check, only to escape the grab. The grabbed character can do that, or he can make a standard escape artist check. It's kludgy, but it means that low level little guys still have the standard escape artist option, while high level little guys get to at least count their BAB into checks against things that aren't that much tougher than them. Plus, it explains why a character modeled as an experienced grappler would take a few escape artist ranks.
I like the proposed change to size modifiers to make them -2/+2 per size difference, as well.
For 4E, I'd like to see something more abstract, though. The problem with grappling, as already said, is that it is overly detailed for the heroic, hit point system. Perhaps the solution is that grappling stays just as nasty for the wizard or little guy, but there are more options to avoid it in the first place? To my mind, it's not the base grapple rules that are completely wrong, but all the monsters that have improved grab. Since hit ponits are supposed to represent some of your "luck" and ability to avoid things, why not allow the defender to avoid a grapple by taking hit point damage? You could still have some of the penalties for being in a grapple, but only for that round.
So the wizard is beset by the kraken. Rather than submit to the grapple, he twists out of the way (wrenching his back), falls, and rolls. If he tries to cast a spell on his next action, he has to make a Concentration check (or whatever). He takes damage from the tentacle, as if he had been hit, but is not grappled. Sure, the kraken can follow that up and continue to attack, but that's taking his actions. That's a lot better than taking his -20 on one tentacle to completely nullify the wizard. Sure, the wizard will spend some fights avoiding grapples, but now it's useful and heroic.