What people forget about the 8525: it's a mini-computer. It also can't be super thin with all those radios(at least not in 2007). Remember it has tri-band UMTS, quad-band GSM and EDGE, wifi, and BT radios. Plus the powerful processor. Touchscreen might also add to thickness. Not to mention the full keyboard. They may have been able to go a bit thinner but I bet not by much.
I have small and/or thin phones too. No touchscreen and/or no keyboard. No wifi either on some. Something gets sacrificed for the size. And if they do manage to make it with most of that but thin, battery life then suffers and no one is happy AGAIN! We b*&#h too much, LOL!