A wet/dry filter is simply that...the water typically comes in over an overflow box in the tank passes through some mechanical filtration and then trickles over some sort of biomedia (like bio-balls, ceramic rings, etc.). This media is not submerged like it is in your typical canister or
HOB. The water is then pumped back into the tank. I believe the theory is that you can maximize your bacteria's oxygen access by having less water.
IME, I don't think there's really any size that you would "need" one for, but bio-filter capacity is much higher in a wet-dry, so you can save yourself some space and have a lot more media options on larger tanks. Also, this is just a theory, but I haven't seen a lot of small sized wet-drys, so that might have something to do with it too.