On a road bike, the weight over the wheels should be about equal (+/- 5%). That means you want to also be balanced over the bike (+/- 5% -- experts, please refine my "mostly").

While your legs are part of the issue, think of your upper body as a triangle. Your shoulders are at the peak and hands are one corner and your tush the other. Think about balancing that triangle. If that triangle is acute (arms really close to the tush), then you're not stable; if the triangle is really obtuse (as you mention really spread out), that triangle, again, is not stable. However, in between there is that perfect spot.