I don't disagree with Ringer here, but I also feel many golfers stop their shoulder turns half-way into their backswings, and then let the arms keep moving back and around their body. They lose their connection with the torso, which diminishes power and makes it very difficult to time the downswing and make the best contact possible.
The reason I think many instructors advise their students to take shorter backswings is because it forces the students to focus more on hitting the ball with their pivot (the entire body), and not just their upper body. When you lose connection in the backswing, you lose that feeling of effortless power, and then try to make up for it by swinging harder with the arms.
What ringer said about the right foot (for right handed players) is also crucial. The weight should always be directed to the inside of the right foot on the backswing. It's what many call "turning into the right leg." This creates a lot more torque and stores much more energy in the backswing, as well as makes it more difficult for higher handicap players to over-swing (especially if they try to maintain their initial knee flex).
All and all, good players with good body sequencing will lose some power from shortening their swings (like Tiger in the picture Ringer posted), but many of us can do with taking a little shorter backswing. Most amateurs are just going to lose balance, timing and clubhead speed by trying to take the club back as far as they can.