I use mine 90% handheld and it works wonderfully as a portable console. There's nothing hybrid about the portable experience, it's just an extra option that you can safely ignore.
I think the earlier comment is just saying that it's not a dedicated handheld in the sense that you can only use something as a handheld. A major feature is that it can do more than just be a handheld device.
It could absolutely get smaller in the next gen - I think to keep it cheap, relatively powerful and have acceptable battery life is the main reasons it’s as large as it is.
