Internal gears with 350% range are now available and, IMO, if conditions are cramped enough that you'd benefit from folding then you'll also benefit from the superior shifting of an internal gear. Check out the Sturmey Archer 8 speed (the reason to prefer small wheels if you're on a budget).
Smaller sprockets are also less efficient. So increasing your front sprockets is a more efficient solution to gearing up than decreasing the rear down to 9t with a capreo.
Now of course, these aren't good solutions if you need a monster gear range (wide range cassette with a triple), but I think you'll find in such cases the capreo is actually being used. For example, the capreo is used widely on small wheeled recumbents and IIRC there are actually two competing capreo compatible hubs being manufactured for different brands of recumbent trikes.