4th Edition is balanced for five players, plus a DM.
The concept of being balanced at all is relatively new to D&D, but five being the magic number comes as something of a surprise. Previously, D&D has been centred around the rule of four.
The idea of four players is exemplified in the core AD&D classes - fighter, cleric, mage and thief. While earlier editions could be run with any number of players, the rulebooks assumed four players at every table.
4th Edition complicates the party size issue. A core tenet of 4th Ed design is encouraging teamwork and co-operation. One way that it does is through abilities which affect your allies. A typical power might be "Damage your enemy, and then give a small buff to an adjacent ally."
This creates a balance issue. The usefulness of an ally-buffing power is directly proportionate to how many allies you have. The more friends are at the table, the more likely it is that one will be able to benefit from your power. A bigger issue is powers that buff all allies, as these scale up with each player affected.
To properly balance these powers, the designers need to decide how many players they expect will be "standard" - and they've moved right past four and settled on five. You can play with more players than five, or less, but you need to be aware that if you do, the classes and powers aren't balanced. Warlords are heavily gimped in small parties; fighters and paladins get less useful in large expeditions.
Why five? Anyone who's tried to organise a gaming group knows that the more people you need for each session, the less sessions you're going to be able to organise per month. Five seems too many.
In a counter-intuitive fashion, that may be part of the reason. A wise designer knows to compensate for variance. You can tolerably play 4th Edition with between four and six players without badly breaking the balance. That may be a more useful spread than three to five for many gaming groups.
More importantly, the balance shift from five players to four is a noticeably smaller one than from four to three. Five players allows for redundancy; you can afford to have a player miss a game. Setting the balance to five encourages players to form more resilient and long-lasting gaming groups.
This is interesting because it's actually something new in gaming. I've bemoaned the fact that 4th Edition mechanics do nothing to support roleplaying, but what they do support is socialising. If you look at something like White Wolf's World of Darkness you'll find that the game is built from the ground up to promote inter-party bickering; that kind of politics is part of its core gameplay. In 4th Edition, we have an example of a game that uses its mechanics to help people co-operate, work as a team, and get along with each other. The rules of the game promote real-world social gains.
It's also true that the larger group brings some benefits. Larger groups possess more resources - with five players plus a DM, there will be a larger array of rulebooks and accessories available for use in any given session. Larger groups also support role differentiation, which is a key element both of effective teamwork and of the 4th Edition design philosophy.
On the other hand, membership in larger groups is proportionately less satsifying, with each player getting less "turns" and less time in the sun. There's also more potential for personality clashes and real-world interpersonal conflict. You only need to look at any LARP organisation or MMO guild to see the perils of a large player base.
The long term benefits of setting a defined balance number I think will outweigh any losses. Knowing how many players "should" be at the table, modules such as Keep on the Shadowfell can be more tightly balanced (although that doesn't mean they actually are), and the adoption of a default party size allows for feedback from 4th Edition players to be standardised and more usefully inform the design of future games.
 A lot of research has been done into group dynamics and ideal group sizes. Did Wizards of the Coast draw on any of it in setting five as their number? Alternatively, was market research performed to determine the size of the average gaming group?
 Larger party sizes make gaming groups less insular and create more openings for isolated and beginning players. This "open table" philosophy is also reflected in the D&D Insider online tools, which discourage house rules while promoting the concept of an "official character", thereby allowing for easy character portability between campaigns. The rulebooks also provide "standard" numbers of magic items and gold totals for characters of any given level. Was this an explicit design goal, and, if so, how do Wizards of the Coast plan to leverage it on a community level?