I think the battery is so big because it relies on slightly outdated "Elf" technology.
For those not familiar with Elf batteries, the idea is simple: Inside the battery dwells a colony of friendly and industrious elves that work night and day to power your phone. Picture a light bulb powered by a hamster wheel, only with elves.
The upshot is that you can get great battery life, but in addition to charging you will periodically need to smear a small amount of peanut butter on the battery to feed the elves (this is detailed on page 4 of the battery's manual). Also, if you hear a folksy, quiet, yet haunting melody coming from your battery, that means it's working properly, so don't be alarmed.