Yes, but the sheet holder is simply and cleverly designed. It takes up minimal room, and bends the paper slightly concave so that it can't bend and flop downwards. So, it doesn't need to be the full size of the paper it's holding. This saves room and physical materials in the building of the printer. If the sheet holder was the same size as a legal sized piece of paper, they'd probably have to make the printer have a bigger foot-print just to hold that paper holder.
Innovation and design: cutting costs and saving you room!
===================================== One Alvarez in the hand is worth two Taylors and a Martin in the guitar store!