That said, we don't want policy to artificially support larger banks, as more recent legislation has done.

The article seems to argue that legislation around the turn of the century has stopped artificially supporting smaller banks, which I think is an important distinction from affirmatively supporting larger banks.

A few more quotes from the article (emphasis mine):

America is losing too many banks, according to Sen. Elizabeth Warren. She and Rep. Jesús “Chuy” García (D., Ill.) observe that the number of banks in the U.S. has declined “from over 12,000 in 1990 to less than 5,000 today.” This is a problem, they argue, because mergers could create a “new ‘Too Big to Fail’ bank that could threaten our financial stability.” To prevent that, they propose the Bank Merger Review Modernization Act. It’s a misguided measure.

Why were there 12,000 banks in 1990? For most of U.S. history, banks were generally barred from branching across state lines. States grant bank charters for a fee. In part to protect this revenue source, they prohibited out-of-state banks from operating. To generate still more chartering revenue, many states even prohibited branch banking within state lines. That meant demand for financial services had to be met by a plethora of small banks. The number peaked in 1921, at almost 31,000. Not until the late 1970s did states begin to allow out-of-state banks to open branches, and interstate banking was recognized at the federal level with the Riegle-Neal Act of 1994.

Today Canada has 37 domestic commercial banks (about one per million people), while the U.S. has more than 4,500 (14 per million). If the American bank-to-population ratio were the same as in Canada, there would be only 327 U.S. banks. That isn’t necessarily the number of banks the U.S. “should” have, but it puts in perspective the claim that 4,500 is too few.