I used emacs, git, and (soon-to-be)xmonad. The size is not an issue for me, but my problem was mostly with the linux distribution I used.

Eventually, I got rid of ubuntu and settle for archlinux.

I think netbook are great for web application development, especially if you used exotic tools like emacs and xmonad.

I never used an IDE, or heavy duty debugging tools(I find manual debugging to be a great and useful tool), and the rest of tools that need a pretty GUI.