Just to put some image to words, here's a 7 speed freehub. Note the lip on the hub body below the DS flange before the freehub body, and the stops the cassette butts against on the inside of the freehub itself:
And here's an 8/9/10 freehub. Note that the body lip below the flange is greatly reduced and the cassette can slide further onto the freehub body. Those modifications to the hub body and freehub are why it was easy for Shimano to extend the cassette inboard by 2mm without moving the hub flange. They had room to burn.
