Think you are missing one important point, yes the world is moving to smaller systems. But if you have a look at a four socket system with 8 core CPUs in there and add hyperthreading, you end up with a system that to the OS and the application looks like a 64way smp with a bit of numa. And lets see, that looks very much like a "large scalable" system, say 5 years a go. So the hw is getting smaller and cheaper, which allows us to build cheep "large scalable" systems, but as nice as it sounds now you will need an OS that can handle all of those CPUs, and lets see Oracle gets a OS that's been thriving on those types of systems for the last 10+ years, namely Solaris/OpenSolaris.
I do believe that Sun would have done much better if they would have stuck with what they do best, build HW and write infrastructure SW to make that HW shine, rather than trying to become a SW company, of which they have shown a number of times they don't have a clue.... That is selling SW, they do write very good SW