Was the Altar Big Enough?
When King Shlomo inaugurated the Beis Hamikdash which he had built we are told that "On that day the king consecrated the middle of the courtyard that was before the house of Hashem" (Melachim I 8:64).
Exactly what he did is a matter of dispute. Rabbi Yehudas position is that he extended altar status to the floor of the courtyard. This view is based on a literal reading of the concluding words of that passage which report that "the altar of brass that was before Hashem was too small to receive the burnt offerings and meal offerings and the fat of the peace offerings."
The peace offerings, the preceding passage reports, totaled 22,000 oxen and 120,000 sheep. The brass altar from the days of Moshe could not accommodate such a large number of sacrifices and it was necessary to hallow the floor of the courtyard to qualify it for the burning of the fats.
Rabbi Yossi, however, makes the calculation that the increased size of the constructed altar built to replace the brass one was capable of accommodating even this number of sacrifices. What Shlomo did then was to replace the brass altar of Moshe with the one he constructed. His explanation of the term "was too small" is that it was a euphemism for discarding the old altar in favor of the new one.
The Sages calculation that the altar of Shlomo was capable of accommodating the large number of sacrifices is based on the passage which reports that Shlomo offered a thousand burnt offerings on the altar of Moshe in Givon (Melachim I 3:4). If that comparatively tiny altar, with a top surface of only one amah square could accommodate a thousand then surely the new altar with a top of 400 square amot could accommodate all the sacrifices offered at the inauguration.
It should be noted that Rashi in our gemara writes that the top of the altar was 20 x 20 while Rashi in his commentary on Melachim writes that it was 24 x 24. His commentary here is based on the opinion of Rabbi Yossi, quoted later (on 61b) that the altar of Shlomo was only 20 x 20 and was expanded to 24 x 24 in the second Beis Hamikdash while Rashi in Melachim goes with the position of the other Sages that it was always 24 x 24.
The Passive Fire
When Jews returned to Yerushalayim from Babylonian exile and rebuilt the Beis Hamikdash they made the altar surface considerably larger than the one which existed in the first Beis Hamikdash. The reason for this enlargement, explains Rabbi Yossef, was that there was not enough space on the size of the first altar to accommodate all the sacrifices they wished to offer.
A challenge to this approach was offered by his disciple, the Sage Abaye, from a comparison of two passages describing the size of the Jewish population in Eretz Yisrael during the two Temple periods.
"Yehuda and Yisrael were as numerous as the sand by the sea" (Melachim I 4:20) is how Jewry is described in the first Beis Hamikdash era.
"The entire congregation was forty-two thousand three hundred and sixty" (Ezra 2:64) is the census figure on the number of returnees building the second Beis Hamikdash.
If the altar of the first could accommodate a number as immeasurable as sand could it not certainly accommodate the much smaller number of returnees?
The solution to this mystery is found in another gemara (Mesechta Yoma 21b) which lists fire from Heaven upon the altar as one of the five things which the first Beis Hamikdash had and the second lacked. This is then qualified by pointing out that even though fire did descend from Heaven in the second Beis Hamikdash as well, it did not assist the man-made fire in consuming what was placed upon the altar. Lacking this input from the heavenly fire it was imperative to build a larger altar surface for burning the sacrifices offered in the second Beis Hamikdash even by a smaller populace.