The Character Paradox

In looking over the favorite character lists that some of my blolleagues and myself have been posting over the past week or so an apparent paradox leaps out at me. This is: 1) For a reader, memorable characters are larger than life. They are extremes in one way or another. 2) For a writer, larger than life characters are not realistic, and therefore appear weak.

Is this an actual paradox or am I reading too much into it? If it is a paradox I wonder how to resolve it. Are readers and writers doomed to war with each other on this issue?