Lyotard is not in fact against grand narratives as such, but against their dogmatically exclusive foundational use, that is why he calls them « grand narratives of legitimation ». If one subtracts the dogmatic and exclusive elements, he can accept grand syntheses as singular games or moves within a game.
The term « grand » refers to the scope, and « petit » refers to the local specific and testable activation and application. In this sense grand and petit are not mutually exclusive. A grand synthesis can be held experimentally and not dogmatically, being adapted and modified in terms of evolving considerations.
When Michel Serres claims that contemporary science provides us with an acceptable grand narrative, stretching from the Big Bang through the formation of stars and planets up to today, and which is true, he is not disagreeing with Lyotard, who he never cites. He is disagreeing with a certain usage of Lyotard that he encountered when he taught in the US, when he taught at Stanford.
Lyotard would not disagree with Serres’ grand narrative here, he would merely maintain that it was incomplete. Lyotard’s thought evolved after THE POSTMODERN CONDITION (1979) and he endorsed the scientific grand narrative of increasing complexification, but rejected its use for purposes of legitimation whether ethical or political.
The whole discussion of grand narratives is muddied because Lyotard’s thought evolved after THE POSTMODERN CONDITION, although the details are scattered and less well-known, and Michel Serres deliberately misunderstood the sense of grand narrative.
Lyotard himself came to criticise THE POSTMODERN CONDITION as too sociological and historical and came to see the postmodern as co-present with the modern, as a tendency undermining it from within, rather than its historical successor.
Lyotard’s key examples of grand narratives are the Enlightenment faith in Progress, Liberalism, Marxism, and Modernism. Their key attributes are not so much « size » or synthetic scope but their status as meta-narratives and as legitimating instances (i.e. as the source of prescriptions and proscriptions having normative force and, in principle, implementative power).
Michel Serres’ grand narrative is not just the origin story of the Big Bang and its sequels as found in Physics, but the whole saga of Big Bang-evolution of stars and planets-origin of life-evolution of humanity-history of civilisations-projected destinies of Earth and Sun-life cycle of galaxies-scenarios of the heat death of the universe and its alternatives. It is a patchwork synthesis of all the sciences.
Serres claims that this saga is the contemporary grand narrative and that it is our way of placing any event in its context and foundational for an ethics of invention. In his post-THE POSTMODERN CONDITION phase Lyotard basically accepts this scientific narrative, but he denies it universal prescriptive force, arguing that differends will always present themselves when we try to regulate thought and (political, ethical) action uniquely in its terms.
That is to say Lyotard limits this contemporary narrative, insofar as it is scientific, to the referential domain, and denies it meta-status (validity over other domains). Insofar as it is « meta- » and goes beyond the referential domain Lyotard considers that it is just one story amongst many and neither foundational for the other types of story nor supreme instance of legitimation.
Whereas in his THE POSTMODERN CONDITION phase Lyotard was willing to extrapolate « postmodern » contents from physics (e.g. quantum uncertainty, catastrophe theory) into philosophical categories, in his post-THE POSTMODERN CONDITION phase he imposed a strict demarcation of phrase-regimes.
In this aspect Lyotard came to converge with Althusser’s analysis of the « spontaneous philosophy » of scientists, and his thoughts on this subject (as I briefly summarise them here) can be seen as giving further precision to Althusser’s theses.
Note: I am grateful to Eric Sapp, whose discussion helped me to clarify my ideas.