Giant animals need giant lungs or gill systems. Their respiratory systems need to be very efficient to provide oxygen, and thus energy to their muscles. Due to the weight of their huge bodies, giant animals probably would have had difficulty breathing if they were to lay down. A beached whale is smothered because the buoyancy of the water is no longer available to support its internal organs.
Respiration for insects is quite different. They rely on tracheal gas exchange as air is sent through spiracles to tracheoles, which are distributed all throughout the body. Oxygen must diffuse to the tracheoles, which takes a long time. The amount of oxygen in the air, therefore, controls how active an insect is and how large it can grow. High oxygen levels in the Carboniferous atmosphere, as you may recall, allowed the dragonflies to grow with wingspans up to 2.5 feet! (photo: artist's impression of the circulatory system transporting nutrients and respiratory gases. Source: www.interlog.com)
