I think its perfect... I actually run 1 27" iMac and 2 27" dell monitors along side it. Not to much at all 
i use a 23" lcd apple cinema HD display...but i'm not sure i'd like to go down in monitor size with the 21" imac and worry the 27 incher would be too huge...
I personally have always preferred one large display to two separate smaller displays. Always seemed easier to spread out on one big one than decide what gets put on monitor two instead. Maybe its just me...
Isn't there a formula for calculating how far away you should sit from a display based on its size? There's definitely one for TVs, so I would think there's one for PC monitors, too. My desk has the width to handle a 50" display, but it's far too shallow to put me in the optimal viewing position.
They are too big and also pointless for the majority of us.... :::snip:::
For those that say the 27" is to big for them and they have wasted space, you bought the wrong computer.