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Has the technology not advanced any to allow a reduced size?

Actually, it has. Newer "class D" amplifiers (which are not "digital" per se but are closely related to the sort of switching power supply used in computers) have much lower heat output and thus can be significantly smaller and lighter than "equivalent" old school transitor amplifiers (much less tube amps). Sony has gone class-D on most of their receivers, and Harman-Kardon has as well. Many of the "home theater in a box" systems use class D amps as do many subwoofer internal amps and a number of car audio amps. The scuttlebutt, according to an audiophile friend of mine, is that class D doesn't sound quite as good as traditional amps until you start looking at more esoteric models. See, for example, some articles on the topic.

Suffice to say that, after a few years, you should expect class D amps to take over the world. Of course, that doesn't mean that they won't find some other way to make your amplifier weigh more than it needs to.