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The REAL reason the Wii (and I sippose the GC aswell, but I know for a fact this is for the Wii) is so small is because Iwata told the designers of the Wii he wanted a small, compact console so that it could sit beside the TV without taking much space, be it sitting on top of a DVD player or standing at the side of the television. ALso, the portability of the console. If it was needed to be taken, say, to a firend's house, you would simply need to unplug it and place it in a small bag. It's pretty comfortable to take it to places. I can't say the same about the 360 or PS3.

I'm guessing the same was thought out with the GC.

As technology develops, systems will only get smaller and more powerful.