I think crazy size optimization like that is a fun exercise, but I completely disagree with your "sadly" there. Avoiding the need to do all this silly micro-optimization means more time to create things that people actually care about and want to use.

Yes, modern software is comparatively huge and bloated, but the less your average programmer has to worry about code size and speed, the larger the the body of useful applications we'll have.

I don't know, it's only last year I was trying to squeeze a pixel shader down to 64 ARB_fragment_program instructions to fit on older ATI cards. The cycle of hardware reincarnation keeps giving me reasons to dust off the 8 bit skills. Writing for cell phones or even JavaScript environments often feels like old times.

That must be one of the reasons why a stock install of a basic os takes up a gig or more of harddrive space and a similar amount of ram ?

If you want to see absolutely blistering speed try installing a 10 year old linux distro with X on it.