I think that's what makes epic ITX rigs so special. Small, weak looks PC and then BAM! Left turn, you're playing BF3 on something no bigger than your average mousemat. A few years ago I managed a fully watercooled ITX build with an i7-860 at 4GHz and a GTX460 with its nuts clocked off. Loved that rig. Sent from the public toilets outside the pub.
I'd say the majority of gamers are still going for full ATX builds with a small minority going for matx or itx either for space saving or taking to friends places/LAN parties... While I can see the appeal of an itx rig you'll never have the same cooling or expansion options as a larger case. For me the cooling + being able to add plenty of HDDs or whatever is far more important than size.
The reason I'm going itx is space. As it stand I no longer have room for a case the size of my P190. The fact that you can cram such a good build into a tiny space is fantastic. But it costs you in the wallet.
That is not as true nowadays. The last few graphics cards to be chugged out haven't changed massively in performance but have two very noticeable differences; size and power consumption. Take the cooler off of a GTX 670 and you'll see a tiny PCB. They even made a 670 mini.
I do think that a lot of people are now starting to make smaller rigs. Partly because you can get a large amount of power in a smaller footprint, but also because for some (like me) watercooling and SLI-ing isn't in the short term (next 5 years) horizon. I am still renting, that means moving every so often as circumstances change and lugging around a 11+kg case is simply not attractive every time I move every 1-2 years. I'd like to think this is the same for a fair few people. The market has moved to the point where you can get powerful rigs in tiny spaces. Sure, the cooling may not be awesome, but quiet is semi-achievable and power is usually sufficient in a i5-k + single powerful GPU. But then, I like to think I am a enthusiast-lite, not a uber-modder.
When I go over to hardwareluxx.de allmost 75% of all the worklogs there show the TJ07, so I wouldn't say that "all" of the people are going smaller and smaller. Alot depends on the forums you visit and what people do hang around there. Here on bit-tech the people seem more settled and reasonable and that's the reason for more reasonable builds which are totally realizable in a miniITX form factor (i5/i7 + single GPU). I've had a Sugo 06 and a LianLi Q08 so far but I switched for µATX again as the bigger cases can be cooled more silently, especially if you have a somewhat beefy GPU on air-cooling. Now however, after getting more and more disinterested in playing games I'm switching back to miniITX again and even smaller with a Chieftech BT-02B as I won't need anything beefier than a HD7750 or something alike.
