Riddle me this

So I was playing around with my computer options today (yes, it was a slow Friday), and i came across a dialog i'd seen a thousand times before.  Specifically the Visual Effects dialog:

And i started dinkering around in it.  Then all of a sudden, while i was scrolling down to see some more options, i suddenly found myself asking: "why on earth am i scrolling down through this list??  It's not very long, and there's plenty of space below the list to extend this to!!"   Basically, the UI could have been:

Voila, everthing fits.  You could even add some more space underneath, just in case localization causes the strings to be so wide that you need a horizontal scrollbar.  However, it certainly seems like in any event you should be able to fit all the items comfortably, and there was no point in the scroll bar at all.

Can anybody help me out here?  What am i missing?  Is there a UI priniciple, or expected use scenario where it makes more sense to go with the current UI rather than my mocked up version?