Depends on your audience. For a lot of in-house applications, that wouldn't be much of a problem. But if you are trying to build a new social media web site, it might well be.
I mostly agree with you, but, just to play devil's advocate...
How exactly would you propose cramming a usable Python runtime into a download that was substantially less than 1.5 MB in size? On the OS X 10.5 box I'm sitting at right now, the 'libpython2.6.a' static library from my source build of Python 2.6 is over 6 MB. The actual 'python' binary is nearly 2 MB, and stripped of all debugging symbols, still comes in at about 1.4 MB.
If you had some really good compression, and included only a small part of the standard library, I can see getting a CPython package in around the 2-3 MB mark, but not much more.
