I personally find shorter functions harder to understand than longer ones, since they usually rely heavily on other function calls, which makes tracing the logic and debugging a bit of an adventure.
A good IDE helps with the tracing aspect. The method/function names bear semantics.
A method call "move_monsters" tells quite well what it does. A 20 line block of code which does it, doesn't tell so easily. So each called function has a name that speaks for itself, and basically lifts the whole thing onto a higher level.
I agree that the innermost loops of a pixel processing pipeline have different constraints. But still, many languages can inline functions, so you do not loose performance due to the split, and still gain the higher semantic level.
