Putting it that way without mentioning that it's only 1.4% of the 2073600 pixels available on those same displays is a bit misleading, don't you think?
It's a much higher fraction of the vertical space available though, which is terribly underprovisioned on modern displays. We're all trying to scroll vertical text content on a screen intended for watching movies, and it sucks.
I haven't had a chance to actually try this yet, but it looks great from the shots. Gnome 3 is doing similar things with hot corners and I like that too.
So programs will make their basic functionality more discoverable instead of hiding it in the menus? And when only less-used functions are relegated to the menus, there's not much point in having them visible all the time. There will be a larger contrast between common, discoverable functions and rare, hidden-away ones.
There is a specific answer -- the designers must have thought it had specific advantages over the previous behavior. Whether these advantages exist and are worth it can be argued about, but they hopefully had something in mind! :)
It's good for netbooks. That being said, I've got 11.04 running unity on the mother of all netbooks, the original eeePC 7". I click on the application finder and it is too large to show the search box on-screen - there's no intelligence; instead of showing one line of icons and the search box, it shows the stock two lines and kicks the search box offscreen.
I have unity on a VM on a 1920x1200 screen as well. Here I have a lot of screen-estate... and the interface is too small, really. On such a large screen, when I want to interact with it, it's too much out of the way.
So, in my experience, unity isn't for large or small screens.