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GIF is a ♥♥♥♥♥♥ old format unfortunately and file sizes can quickly go up. The GIF on your last upload is almost 600 KB, so it was likely above 1 MB in size before it resized it to 160x160px. That does not sound like much but if you consider that a single page of search results contains 30 items, it can quickly add up to 15 - 20 MB just to download all preview images which is pretty crazy.
Generally, it's fine to go down all the way to 128x128px because that is the resolution that Wallpaper Engine actually requests from the Steam preview image servers. You can add additional images (and YouTube previews) on the Workshop page of your item if you wish to do so, but the preview image itself has to fall under these hard limitations.
If you want to be in full control of the preview image, use a free tool like ScreenToGif and record a 256x256 GIF yourself:
https://www.screentogif.com/
You'll see that you will run into the 1 MB size limit quickly though, it's best to reduce the FPS limit to 10 or lower at that resolution.