Originally posted by Dahl
Shouldn't this option be under system preference>appearance ?
That's where I was looking.
No, you have to think about how widespread you want your change to be.
As a general rule, if a change affects the whole system, eg resolution, number of recent items etc, then it is in System Preferences.
If a change affects a whole application (remember Finder is an application), eg default action when the application is opened, then this will be in the application's preferences in the application menu.
If an option is document or window specific, eg icon size for a window, it will be somewhere else, maybe a menu item, or a button on the window etc.
If a setting could be applied to every window or just one (as is the case here), it usually fits into the last category, with some kind of option of whether it affects every window/document or just the current one.