Your line of thinking is spot-on in questioning why the router is inserted all the way down into the holder. If it could be held closer to the bottom, that would help tremendously in making things more rigid. But as you also commented, it would reduce Z travel by the amount you raise it up. But it might be a good trade-off if doing a steel job.
I will tell you 3 things I love about the design of the HIGH-Z machine: The spindle being held at the bottom, the bronze bearings, and the UHMW (or whatever material that is that I saw in a pic for one of their machines) for the screw drive nut. All these design features lend themselves to a machine that should be very solid & capable. Ball screws & linear bearings are great for accuracy, but they aren’t the first choice for a vibration-induced load like you would see when machining steel. These same features also make for a nearly maintenance-free drive/guide system. No worries of cleaning & oiling.