I get the impression that cars’ headlights are getting smaller and smaller these days. Cars like the Porsche 911 seem to sacrifice much aerodynamics to accomodate large headlights, while modern cars have tiny slits for the lights. I thought maybe modern lightbulbs are smaller, but the bulb in my '79 car is already pretty small, surrounded by a big reflector plate. So is there another reason for this?
You’re correct. The bulbs, and assemblies, are getting smaller. A new type of bulb met with government approval in the late '90s and is now being implemented on a variety of models. One of my favorites is the Toyota Celica, which uses the small bulbs behind a wild glass fascia that appears to be mostly stylistic in design.
Incidentally, the giant frog-eyes on the Porsche 911s and 928s are completely intentional, as you suspected. Sticklers for safety and performance, Porsche has traditionally used some of the largest and most powerful headlights available. While the bulb itself is small, the glass housing is what disperses the beam with the older bulbs. The newer ones seem to be more precisely designed to cast a similar beam without the use of the larger glass housing. Toyota appears to have used a combination of the two to make the car look cool, which is all right with me.
I’d go with modern light-bulbs throwing out more light (using xenon instead of hallogen or something like that), so there is no longer a need for the such a big reflector plate anymore.
The old, large Porsche 911 headlights are a stylitic carryover from the distinctive sloped headlights on the earlier 356. Those came directly from the VW beetle which used the glass cover over ordinary sealed beams until '66.