I believe it was meant in the sense that if you shrunk the desktop monitor you use regularly, day in, day out, down to 7" or smaller you would not find it as convenient to use and it would impact your productivity. I would agree with that.
It's all about finding that perfect size and resolution which suits the user and what they do. I find large monitors with high resolution impede my productivity. 13" or 15" 4:3, or 19" widescreen, are perfect for what I generally do. Larger than that and I have never found them as comfortable to use.