That statement is over the top. The lenses can be smaller, certainly. But more of the smaller also comes from not having to cram as much stuff in. A rangefinder lens is a manual focus lens, with fully manual aperture (ie no auto-stop down or full aperture viewing), no auto focus mechanism, no VR mechanism, etc. And rangefinders, with the exception of a couple, are nearly universally film cameras. Film grain is not sensitive to the direction of its activating light. Digital sensors are, so without pretty extraordinary measures, you get considerable light fall-off in the periphery, and this is more extreme the larger the sensor is. Again, an M7 doesn't care. An M9 does. And the M9 sensor actually tilts the outside sensors slightly toward optical center for this reason. It's one reason that the M9 sensor is so expensive. It is, moreover, not impossible to design telecentric SLR lenses to have very little distortion: the Sigma 12-24 is an existence proof.
If the claim is that Leica lenses are sharper and have less distortion, that's true. They also have significantly less function and cost dramatically more than most lenses to which they're being compared, so it is far from obvious what the contribution of the basic system design is and how much is simply a lot more engineering effort and cost being put into the end product. Also, note that rangefinder lenses are nearly universally primes, and most recent SLR primes are pretty damn good too. And even the expensive ones are half the price of the Leica equivalents, or less. As one example, the Nikkor 24/f1.4 is about $2000; the Leica 24/f1.4 is $7000. And while that Leica is a truly excellent lens, it's not as if the Nikkor is exactly a slouch.
If you want to stick to full frame, for whatever reason, that's your perogative. But there is no inherent difference in distortion between the formats, assuming that FOV is equalized. Try comparing, for example, the 24/f1.4 AFS on DX to the 35/f1.4 AIS on FX - you will find that the DX image has significantly less curvature of field, the same perspective "distortion" and significantly higher sharpness, at least wide open. Compare the 24 on DX against the 35/f1.4 AFS on FX and you'll find that they're about equal in sharpness, curvature of field and essentially identical in perspective.
_____ Brian... a bicoastal Nikonian and Team Member
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