I am told that lower gauge needles (broader needles) are used during blood donation to minimize the damage to the RBCs. If the probability of damaging the drawn RBCs is greater with Higher gauge needles, then why are they used to draw blood for blood tests? Aren't RBCs checked during blood tests?
Gauge sizes do affect the red blood cells (RBCs). However, this mostly applies in the high range with 23 gauge needles (and higher) predisposing the sample to hemolysis (the destruction of RBCs) which causes problems for some blood tests (namely the CBC). Large needles come with problems of their own like an increased risk of creating a tear in the blood vessel with associated pain etc. and failure to acquire the blood sample. These large needles are currently only recommended for blood donation, both to prevent hemolysis but also to speed up the donation process since they allow more blood flow than smaller needles.
So in short, large needles are not without their own problems so needles that are smaller should be used for most blood sampling. However, this may create problems if the needle is very small.