NIHAO V: Too big doesn't fail -- reconciling the conflict between LCDM predictions and the circular velocities of nearby field galaxies

We compare the half-light circular velocities, V_{1/2}, of dwarf galaxies in the Local Group to the predicted circular velocity curves of galaxies in the NIHAO suite of LCDM simulations. We use a subset of 34 simulations in which the central galaxy has a stellar luminosity in the range 0.5 x 10^5 < L_V < 2 x 10^8 L_{sun}. The NIHAO galaxy simulations reproduce the relation between stellar mass and halo mass from abundance matching, as well as the observed half-light size vs luminosity relation. The corresponding dissipationless simulations over-predict the V_{1/2}, recovering the problem known as too big to fail (TBTF). By contrast, the NIHAO simulations have expanded dark matter haloes, and provide an excellent match to the distribution of V_{1/2} for galaxies with L_V > 2 x 10^6 L_{sun}. For lower luminosities our simulations predict very little halo response, and tend to over predict the observed circular velocities. In the context of LCDM, this could signal the increased stochasticity of star formation in haloes below M_{halo} \sim 10^{10} M_{sun}, or the role of environmental effects. Thus, haloes that are "too big to fail", do not fail LCDM, but haloes that are "too small to pass" (the galaxy formation threshold) provide a future test of LCDM.