Reduce the size of the iPhone Simulator window?

You should try cmd 2 or cmd 3 on your keyboard to scale down.

And cmd 1 to get back to the original scale.

You can scale iOS simulator to desire scale (i tried from 0.2 to 1.4 ) and it worked for me. To do this you have to go to /Library/Preferences and edit com.apple.iphonesimulator.plist file. Edit value of KEY SimulatorWindowLastScale to your desired scale.

I tried this on latest Version of Mountain Lion 10.8.4 & iOS simulator 6.0.

Enjoy!!!! Let me know if it worked for you guys.

a picture is worth a thousand words

Update

This is no longer the correct answer.

---

Unfortunately no, it must maintain that size. We had the same issue. I wish I could give you a more complete answer, however it seems reasonable for the accurate rendering profiling that it maintains 1-to-1 pixel ratio, otherwise it would have to sub-sample the pixels, causing the profiling to be incorrect.