Well, there's Saper's project if you're looking for something smaller. Valve's prototype design isn't suited to a commercial case, though, due to the customized parts that require very specific hardware. Sold as a pre-built Steam Machine, sure. But as a standalone case, it needs to be more flexible to allow for a wider array of components.There are some people (myself included) who think this case is already too big as is. I personally want the 7 liter enclosure valve showed off as a prototype, and i'll just figure out how to make custom cabling to fit in hardware.
I also want the case to be easy to live with; there's little point to a system as small as an Xbox if it sounds like a datavac while it's running. That's an exaggeration, but noise is important, and making things quieter necessarily requires more space.
Aesthetics are another concern of mine, and that has its own size cost associated with it. If you don't care about screws being visible all over the outside of the case, you can skip the tool-less latches and save a few mm in each dimension.