Package size doesn't matter in terms of computing complexity. You could generate textures and models algorithmically in code and have an incredibly small binary while still executing a complex world.
That demo is also from 2009 which is ancient at this point. Not to mention moving spectators does nothing to actually improve the parts that matter for a racing simulation. If you're driving, you wouldn't notice the spectators moving, and if anything you'd probably disable it becuase even 5 extra FPS is better than nonsense eyecandy.