In and of itself simply adding displacement does nothing good for a boat, especially offshore. Weight does not automatically add to stability, weight does not inherently add to motion comfort, it does not inherently increase strength, nor does it automatically add to carrying capacity. Excess weight, especially in the wrong places hurts all of these things, plus it makes a boat harder to handly and hurts performance. But that's a topic for another thread.
Jeff, here you are saying just adding displacement doesn't improve. In the sense that this is not always improves.
But on the other hand, (mass) moment of inertia is
The mass moment of inertia is a factor in the efforts to change a body (here boat) movement (around an axis). The higher MoI the more energy is required. Thus a boat with higher MoI will not be so easy to excite in movements as rollings etc - and then percieved as more stable (downside is then when the boat actually has been exited, then it take longer time to dampen the movements).
As the MoI is increasing with mass and size, both correlated to displacement, then one would generally expect higher displacement - higher stability (within limits).
Marchaj reasoned along these lines in his book "Seaworthiness -the forgotten factor". However, some of the conclusions in his book seems exaggerated. As said above, increased MoI has its drawbacks.