First, they designed it so it could be used with
glasses. This is why they call is 'Google Glass' - because the display is designed to just take up a portion of your peripheral view, and be integratable into fashion sunglasses and prescription eyewear.
This is why this thread is a little 'missing the point' that the Google Glass prototypes we see are a prototype to keep the display on your head and house the electronics - I think the end goal is to have it integrated into fashion and prescription eyewear and the prototype frames you see are just for R&D and early adopters.
But if you have ever tried on a current-generation of display glasses, you would understand that its a huge technological leap they've taken to get what they have working so far into that tiny form factor already.