It does look huge. but I like the way it looks. If it can be like this only the same outside dimensions as the current model and with a larger screen/smaller bezel, I'd be happy. heck, I'd probably be happy no matter what the next one looks like. Apple makes some sexy products to be sure.
One thing I don't like on this mock up is the home button encroaching into the outer frame. I like how the actual current models are kept away from the frame.