Team sizes are capped, as far as I know. However, playing devil's advocate, shouldn't the best in the world compete regardless of whether they come from 10 different countries or whether 9 come from one country and 1 from a second country?
Onto your main point concertning amateurs: it won't revert to that regardless of what it was "intended to be." To be honest, that concept of "amateurs only" itself is out of date, too. The main reason for the change to allow professionals is, actually, beacause what it was "intended to be" was extremely inaccurate as time moved forward. When the modern Olympics were started in 1896, the thinking was that professionals were cheaters. People were supposed to participate to be part of the (Olympic) event, not to win. Professional athletes of the time were considered "win at all costs" and "practice makes perfect;" both of which were frowned upon by the founders of the IOC. How excited would you be to watch players that played pond hockey only compete? That is what the Olympics were originally "intended to be" by their founders. Not quite "the best in the world," which is what the modern Olympics are now.
Another crucial point in the argument to allow pros was, as you mentioned, "full-time, state-sponsored" amateurs. It is not so much a question is how can true amatuers hockey players compete with the Red Army team, but how can self-financed amateur hockey players afford to compete with state-sponsored amateurs.
Lastly, the IOC has kind of protected themselvs in this debate by allowing the governing bodies of the sports themselves decide, ie: IIHF, FIFA, etc. The only two (summer, anyway) sports that still do not allow pros are baseball and boxing. However, many governing bodies also place restrictions while still allowing pros. For example, FIFA allows pros, but only 3 per team may be 23 years old or older.