Well, if it's true that's a 1.7ah battery, and it's 25% shorter but otherwise the same dimensions, then in it has 75% percent of the volume and 85% of the capacity compared to the the 2ah conventional battery. So the capacity per unit volume is about 13% greater.
It weighs 0.7lbs. The DCB203-2 they compare it to weighs 1lb. That's important. Their new battery weights close to 2/3 what their older one weighs. The capacity per unit weight is about 60% greater.
Most importantly, the use of pouch cells provides them the ability to make a battery pack of arbitrary size or capacity. (But obviously not both at the same time as the two are related). With cylindrical cells, your essentially limited to the two sizes of cells that are available in those high current cells that are used. There are not a lot of choices. (I bet a lot of cheap knock off packs that only last a few cycles use low current laptop type cells and that's why they die so fast. I looked inside my Metabo HPT batteries and found Samsung cells capable of putting out 30-40amps continuously and over 100 peak for brief periods of time. The lighter pack uses 18650 cells instead of the 21700, also by Samsung. Those cells were capable of 20-30 amps continuously.
I actually looked into whether there were smaller high current cells available. I could find nothing in anything smaller than a 18650 that was suitable.
Since my tools require 10 cells to get 36v, there's not much that can be done to make a smaller lighter battery. They are just large. Similarly, there's not much Dewalt can do to make a battery physically smaller and lighter than their 2ah battery using cylindrical cells. Reducing capacity further just means you can use cheaper cells but physically they are the same size. But pouch cells are available in custom sizes.