"Recognition" ship scale is usually 1:1200 or 1:2400,
This allowed two things. One was to give a scale which replicated the size where recognition might occur in real life. But, much more so, to be able to have one example of each warship class in a reasonably sized (and weighted) format.
That's because these collections get large very quickly. DKM often only had a few ships in each class, but had a number of classes. IJN will be very similar. Which gets to be an issue if you are looking at 30-40 models each. US or UK navy just as complicated, you are looking at around a dozen classes of DD, at least a dozen cruisers; the UK BB and CV classes being smaller than the plethora of US ones. But, that's close to thirty, and has not addressed subs, patrol craft, or amphibious ships at all.
There was s similar situation with recognition aircraft in WWII. These were around 1/144 if memory serves. They sent out carving instructions and partially-finished phenol-resin kits for Scout troops and the like to assemble and finish.
Which is not to say that this could not be done in 1:700. It would be more than impressive. Probably would require and entire wall to display. Which would be impressive, too. Rather like the thread with the fellow who built the entire RN in matchsticks.