The atmosphere is always an issue, we can correct for many of the effects using adaptive optics, but there are always limits. The advantage you get from going bigger on the ground is that you are making a bigger "bucket" to put photons in. More photons = fainter objects are visible, this is the motivation for projects like:
Typically for non-adaptive optics telescope the atmosphere will limit you to the scale of about an arcsecond. Meaning objects which take up less than an arcsecond of the sky will appear as points. Adaptive optics telescopes however have much better resolving power.
prpl
The seeing in Chile is closer to .7 arc seconds. Sub-arcsecond seeing for Rubin has already been achieved across the focal
plane.
ddahlenOP
As I said, just an order of magnitude estimate for many non-adaptive optics telescopes.
https://en.wikipedia.org/wiki/Extremely_Large_Telescope
Typically for non-adaptive optics telescope the atmosphere will limit you to the scale of about an arcsecond. Meaning objects which take up less than an arcsecond of the sky will appear as points. Adaptive optics telescopes however have much better resolving power.