It shouldn't have to be that big. TC managed to get quite a lot of the 2290's functionality into the Nova delay and the Flashback. Not that surprising really as you can no longer build a 2290 as many components are no longer in production. You can however digitally emulate the 2290, that's just number crunching. You don't need a lot of space for that. They couldn't however do everything because the biggest problem is probably how to transfer the 2290's control interface, which occupies quite some 19" front real estate, onto a pedal, which is significantly smaller. You want a lot of functionality, you will get a big pedal, you want a small pedal, you will lose a lot of functionality.
If anything that's probably why the SDD-3K pedal is so big. The digital circuit that emulates the original circuit is probably quite small, but they chose to keep the original interface and functionality so they ended up with a big pedal.