I think the small barrels make good whisky, but you can't age them for very long without being over-oaked. The surface area ratio is all off. Ageing them long enough to
really smooth out might be a bit too oaky and you're going to lose a lot of whisky to evaporation, but aging in a new micro barrel to the proper level of oak you want might not be long enough to let the liquor smooth out as well it could be. Don't get me wrong, good homemade hootch with good cuts will always be smooth, but it can always smooth out even more... nothing beats letting time do it's work. One way around the smoothness issue of young whisky from a small barrel is to use white dog that is not young... let it sit several months on it's own - some of the lighter volatiles will work their way out just given enough time if you crack the jars every few weeks ot let them breathe. Another trick is to use a small barrel that's been recently used once or twice before - the oak is seasoned a bit more and doesn't impart as sharp of a flavor as quickly
The coolest method I've seen for hobby size aging is using a stainless bain-marie with press-fit charred oak lid. It looks just as easy as jars or a barrel but gives a surface area is much more proper for aging proper lengths of time without over oaking or too much volume loss.
Search HomeDistiller for info on the bain-marie method. Personally, I just use the Jack-Daniel's Smoking chips in quart sized mason jars; I rinse them off well with warm water to clean them, fill a mason jar halfway with the chips, then add a tablespoon or two of small heavy toast oak wood chips from a brewshop before filling up the jar about 80% full with white dog. Some other good additions for whisky is the peelings from 2-3 granny smith apples or chunks of honeycomb with muddled blueberries or a 1/2" length of split madagascar vanilla bean. I crack the lids every week or so to let it breathe and they're done on the wood in just a few months. I strain it out the stuff and put the whisky back in clean jars, cracking the lids every couple weeks to let the liquor smooth out more. In several months it's smooth as hell. I've got some that are a few years old and amazing.
If you use mason jars for ANYTHING involving higher proof alchohol, please use PTFE/Teflon disks under the lids. The plastic/rubber sealant on the mason jar lids is not rated for alcohol and the high percentage alcohol will soften and leech out plasticizers and chemicals from the seal. Ever open a brand new mason jar and sniff the chemically smelling air inside? Yeah... you don't want to be leaking that crap into what you're drinking.
These are cheap as hell so there's zero excuse not to buy some now that you know better:
Teflon Jar Lid Liners