In the past few years, laptops have enjoyed a tremendous increase in capacity and speed for 2.5" hard drives. The fact that laptops can now come with hard drives in the 500GB range, spindle speeds upwards of 7200RPM and cache/latency options that put them on-par with desktop hard drives demonstrates how much they've advanced, when even a 32GB laptop HDD was hard to come by not too long ago.
Another area that has benefited from the advance in 2.5" drives has been the Enterprise. Big businesses have found that the advantages of such drives have made them more attractive for use in servers as compared to traditional 3.5" units. Western Digital in particular has claimed that the demand for Enterprise-grade 2.5" drives has increased dramatically, so much that they expect to see 2.5" drives become mainstream for servers in the next few years.
Primary reasons cited for such a change include things like power consumption and heat dissipation, a huge concern when dealing with power-hungry servers in hot environments that must operate 24/7. Another factor has been the boost in storage capacity, where the density of storage for a 2.5" drive put them on an equal playing field. It'll be no big surprise at all when 2.5" drives take over for 3.5" drives altogether, including on the standard home desktop.