PS2 and Xbox were designed to be component-sized. It's not that they couldn't be made smaller. It was a design choice. So those are bad examples.
Technology advances, but we're talking mere months separating each system's launch. Not 5-14 years. There's no breakthrough that's going to happen in such time as to allow the seriously power-hungry components of PS3 or 360 to become as small, cheap, quiet, and cool as Nintendo claims Revolution will be.
That being said, performance CAN come in small packages. One needs only to look at a modern laptop to see that. The problem is that Nintendo isn't just going with small. They're going with small, silent, cheap, and cool.
The size shouldn't be a concern. It's the cheap, silent, and cool parts that should. Those things equate into performance sacrifices. The graphics, for example, of 360 and PS3 are as advanced as current top of the line PC cards, and they're definitely not cheap, silent, or cool cards.
So Matt is right for the wrong reason.