Roger,
First off, couldn't you use the normal jaws for holding the tube internally?
I personally wouldn't go too large, just because it fits, doesn't mean it is right. I could, in theory, put a 17" chuck on mine, but I think the lathe would disintegrate when I turned it on.
A couple of reasons, the first being the larger the chuck, the more mass on startup to get it turning. I know nothing about your lathe, but if it uses those electriconical circuit board thingies, you might just overload it and burn it out. The same goes for actually turning, the larger the item held and turned, the more loading on the motor and board.
The second is actually the mechanical bits of your lathe. These machines are usually made down to a price, and everything on them is designed to do the job and not much more, bearings, gears etc.
So looking at it, go for a larger chuck, but don't push it by going too far.
With the few bucks saved by going for the smaller of the two, look to see if you can put it towards buying a set of soft jaws for the chuck you buy, that will really help improve your tolerances greatly.
I hope this helps
John