If the personalities on the "know everything" teams are not constructive or compatible, then yes--I prefer large, shallow-knowledge-base, specialized teams.
That's not just a personal preference: if you have people that are poor team players who have near-total-overlap with everyone else's skill areas, the quality of the output suffers. It suffers in the long term because everyone wants to leave their mark and has an architectural idea in mind (compared to the a functional high-expertise team's behavior of collaborating at the architectural level and agreeing on a compromise for design direction). It suffers in the short term because burnout, intimidation, and political wheel-spinning become common (compared to a functional high-expertise team's behavior of bringing even comparatively unskilled people up to the team's expertise level surprisingly quickly through a combination of humility, mentorship, and infectious enthusiasm and camaraderie).
That's not just a personal preference: if you have people that are poor team players who have near-total-overlap with everyone else's skill areas, the quality of the output suffers. It suffers in the long term because everyone wants to leave their mark and has an architectural idea in mind (compared to the a functional high-expertise team's behavior of collaborating at the architectural level and agreeing on a compromise for design direction). It suffers in the short term because burnout, intimidation, and political wheel-spinning become common (compared to a functional high-expertise team's behavior of bringing even comparatively unskilled people up to the team's expertise level surprisingly quickly through a combination of humility, mentorship, and infectious enthusiasm and camaraderie).