A great discussion...
And just for the record....Both JJ and Spark are true assets to this forum and everyone reading here is better for it IMO.
With that.
More fuel for conversation.
I agree that many will not feel a difference... but with the amount of money, $16,000 or so, for a new 850... I'd want to feel the refinements in all of the sled.
Many people on here would be better served with a ProRide RMK as well... more stable than the AXYS... But for the true "Tree bangers" and technical terrain masters.... I think that that the loss of travel can be a detriment.
With JJ's comment though... It made me think... some aftermarket shocks shorter compressed lengths while still retaining the correct extended length.
For the extra travel that is surrendered.. Here is a video representation of what I'm talking about. (I've used it before, I know 
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It's old, I know... but it shows what a master Rasmussen is even on old iron.
Would a new 850 allow me to do this move... Heck no... I'm just a novice in comparison.
The moves these guys are making on Dragons and M8's let me know that the limiting factor for me is not my sled (ouch!)
As a note... the 37" front will already, inherently, have less travel than the 40" front end even though the shock has the same travel. I'd hate to limit that travel even more.
Bret, at 1:54 seconds... "bumps" the tree on an extreme sidehill... you can actually watch the shock/suspension on the uphill side absorb the impact and watch the ski extend again... If the shock had limited travel ... he could have had effectively no travel left to deal with that obstacle and he would have been bucked down the hill.... (Dang, that's a Pretty amazing move!!) 
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Thx for the post MH. I don't disagree that the narrower we go the harder it is to maintain travel as we lose leverage (ski closer to the pivot point).
If anything this reduction of leverage ratio will also result in a stiffer overall damping (if you were to take your shocks off your axys). This alone could make for a bad ride (or again, good, depending who you are!~)
Going to go off on a tangent here for a second, hang with me.
In the mountain bike world everything works in trends. Coil is cool. Then air. Now back to coil. Low bars were all the rage. Then tall bars. Wide bars, then narrow. Small wheels. Then Big. Etc etc.
A french racer was known to whoop *** on a bike with 2/3s the travel as the other pros of the time. Then long travel trophy truck suspension was the rage.
What really drove these trends were the riders piloting the bikes. (whoever was winning MUST have the right setup eh?)
Truth is, the suspension package had to fit the rider (and often talent mattered more than technology). The tracks didn't change (relatively speaking) yet there were so many configurations out there, even within the same frameset, it was crazy!
My point is, I'd wager Polaris set this up to be as vanilla as possible. To work for the most riders out there with minimal monkeying. That said, I could see 10% less travel with a stiffer spring rate maybe being better for me than softer and all the travel. Maybe not. But again, there is probably more wiggle room than we pretend. Taste. Riding style. Conditions.
In your example above, maybe he would have gotten bucked. Maybe not. Like I implied above, less travel with a firmer rate could skip over that just like more travel and a softer rate.
Don't forget the big variable in suspension is the medium it is suspending the rider against. Snow. Snow is often a damper all in its own regard. Sometime we have a lot of it, sometimes none. But this alone shows how dynamic of an environment our machines operate in!
