Cooling is the main concern, though. Also, because you have so much less space, it's harder to get all the stuff connected. If 12-layer motherboards come into fasion (not likely) this might get a bit better, though. Moreover, many larger graphics cards can't fit into the case. A Koolance EXOS is'nt much smaller than the computer itself, and air cooling does'nt work so terribly well. 1U's are still the way to go if you have more than two systems and no space, although 2-3u's are still a better value.
What shuttle should do is make the entire case into a giant radiator. Make the case into a wire frame (like the G5) and thread a bunch of tubes all along the top. Fit a tiny pump and resivoir on there somewhere, and throw in a waterblock (which you can change at your option). Presto! A water-cooled SFF.
Of course, that would negate any weight benifit.