Roger Cicala at Lensrentals has been taking a lot of things apart lately. He's tackled a Sony 16mm f/2.8 NEX lens and the Olympus 17mm f/2.8 m4/3 lens this time around. One common question I get is easily answered by looking at the tear down (link at end of story): can lenses get smaller?
Absolutely. On many designs (like these pancakes) it isn't the lens elements that control the diameter of the lens, it's the electronics, motors, and positioning elements. The simplest way to express it is like this way: you'd pay more for significant size shrinkage, because smaller requires precision parts. Both the Sony and the Olympus lenses could be probably one-third the diameter, maybe even smaller. There's not a lot of advantage to making the lens much smaller than the lens mount diameter, as it would make for an awkward handling aspect, but it could be done.