In recent years, a great deal of emphasis has been placed on achieving the diffraction limit with large aperture telescopes. For a well matched focal-plane instrument, the diffraction limit provides the highest possible angular resolution and sensitivity per pixel. But it offers another key advantage as we now show. Conventionally, as the telescope aperture D grows, the instrument size grows in proportion to D, and the cost increases as D2 or faster. However, an instrument that operates at the diffraction limit can break the trend of spiralling costs. In traditional instruments, the light must pass through a succession of large lenses, mirrors and gratings, making it difficult to conserve the integrity of such a small psf. An alternative approach, as we now show, is to couple the diffraction-limited beam directly into an integrated photonic spectrograph operating in low-order modes.