According to devs disc space has been an issue ever since the 360's launch resulting in sacrifices (indirectly also affecting ports).
It's not per se to do with the length of a game, but rather the quality or varierty (re-usage) of assets. For example in Tomb Raider they re-used the same ship twice in two very seperate parts (it felt wrong) of the game or for example lower bitrate audio or texture quality sacrifices. Like being able to take more and higher quality photograhs with your camera with more capacity.
AAA Uncharted 2 only took 2 years to make. Once you got the technology in place to take advantage of the abilities it doesn't take too much extra time, with potentially amazing results. For example Killzone 3 will likely push the PS3 much further without taking extra development time.
Actually have to think where to best make these sacrifices can be a time consuming process. 6.8 GB isn't much these days, even some PS2 maxed out DVD, high quality high definition assets with the same varierty take up more storage.
