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This is actually proper kitchen design (the island being in the way would be a problem, though). It's called a "kitchen triangle" and the proper shape and size of it determines how efficient a kitchen is (the third vertex is the sink).
A properly sized and shaped kitchen triangle can help turn cooking into a very efficient experience. One too large, or with an island in the way, or not correctly shaped (or not even a triangle) can make it a horrible place to cook in.
I will grant, though, that in some cases the kitchen doesn't ever serve a practical purpose, but instead serves as an interior "conspicuous consumption" focal point. Easiest way to tell if this is the case is how well used the appliances are; if they look showroom shiny with nary a splatter, dent, scratch, etc on them - you are likely not looking at a working kitchen.
Finally - all of this is moot if the person cooking is skilled enough. My wife has cooked highly commented meals for hundreds of people out of a kitchen smaller than some McMansion's walk-in pantry, using a stove that only had "on" and "off" (where "on" was set at 500 degrees F), and a work surface smaller than her cutting board (this was a "commercial" kitchen at one of here former employers who had a strange sense of what was the best things to spend money on - maintenance was not one of them).