As a rule of thumb, all the spaces depicted in the game world should be considered much larger than they are despicted in game. Otherwise, we would have things like Ul'dah having exactly one tavern and exactly one merchant street even though it's a commercial city. Or outer 'towns' and 'villages' that are only two or three houses.
The reason the game is despicted smaller than it is is for gameplay and design reasons: making a world based on reality's scales would not only take a long time to fill up (meaning you would have long spaces of uninteresting locales), but would also mean the players have to spend more time travelling than actually playing.
So, yes, it's safe to assume that the Sagolii desert is much bigger than shown.
The reason the game is despicted smaller than it is is for gameplay and design reasons: making a world based on reality's scales would not only take a long time to fill up (meaning you would have long spaces of uninteresting locales), but would also mean the players have to spend more time travelling than actually playing.
So, yes, it's safe to assume that the Sagolii desert is much bigger than shown.