Okay, apparently it's not that YouTube is shrinking the player, apparently, the player now conforms to the format of the video - so if the video itself is in 4:3, the player is 4:3, and if the video is 16:9, the player is 16:9.
Unforunately, they're keeping the player the same width on the page, so it's widescreen/16:9 videos that appear shrunken to keep the player the same width on the page.