There's no need to shrink it. It can be done in software, ignore touches/dragging in the periphery. Actually what could be done is to give tactile feedback whe

There's no need to shrink it. It can be done in software, ignore touches/dragging in the periphery. Actually what could be done is to give tactile feedback when you cross into that ignored region so it feels like your finger just went over an edge. Then the area on the outside of those edges can be configurable tap areas: more buttons! The logical conclusion is to make it a display too so you can see the buttons.