In a sense, this is something I've wanted from role-playing games for years. Limited storylines can allow for tragedy in a way that conventional save-the-world narratives don't allow, something Dragon Age 2 certainly attempts to accomplish. It's also simply novel to tell a story that isn't based on a well-known "epic" form.
BioWare games in particular were in a structural rut before Dragon Age 2 (and Mass Effect 3). From Neverwinter Nights and Knights Of The Old Republic on, each game followed a pattern: an introductory area, which usually disappears from the map, followed by a quest with four or five parts, which can be done in any order, all of which lead to a climactic confrontation. This familiarity is what drove me away from Jade Empire the first time I played it – the entirety of Chinese culture to pick and choose from for your story, and you make it feel like Knights Of The Middle Kingdom? The rhythm of the quests was tired.
But that doesn't mean that Dragon Age 2's focus on Kirkwall is entirely new. In many ways, it's a throwback to older games, especially D&D games like the Gold Box series, which tended to have limited geographical focuses (especially the first, Pool Of Radiance, which took place in a single city). But the closest comparison is probably BioWare's Baldur's Gate 2: Shadows Of Amn, another game with an unbalanced narrative that took place in a single city. Amn, like Kirkwall, bombards the player with quests, characters to recruit and negotiate, and locations to explore both inside and outside of the city. Even the initial main quest is the same in both games: do side quests (and learn the city/characters) until you have enough money to afford the buy-in. If anything, Dragon Age 2's imbalanced focus on its city is mild compared to Baldur's Gate 2's gloriously chaotic mess of side quests.
From this narrative imbalance come Dragon Age 2's most commonly cited strengths as well as weaknesses. By placing the characters in a relatively static situation over time, dynamic character development is easier and more effective – it's someone akin to Star Trek developing serialization when it used a sedentary space station instead of a traveling ship in Deep Space 9. So Aveline, Varric, and even Hawke herself all feel stronger than most other companions in RPGs, which especially helps Merrill in the finale of her intense questline.
On the other hand, consistent use of the same locations leads directly to one of the biggest complaints about Dragon Age 2, its use of recycled environments for different quests. RPGs, which are usually among the biggest and longest of games, have long struggled with repetition, quality, and avoiding design overrun, but for whatever reason DA2's samey environments seem particularly egregious (the use of the same mini-maps for different caves seems like it could easily have been avoided).
Considering Rowan actually mentions Baldur's Gate II, I'm surprised he didn't notice the flaw of his argument, and namely that the recycled locations and claustrophobic focus of Dragon Age II don't derive by the fact that it's set in a single city but by an evident lack of time and resources.