I think the point is that, even having arms as you say and slammed -17° stem, back is still not flat (level?). That's the issue. Two things:

1) Negative stem angles of greater than 17° are possible, so my point is a bit of a red herring.
2) If a short-legged person can get their back flat, their swept area will be less, thus less watts required per unit speed plus fast descents.

So no, I don't think it's a disadvantage, I have short legs and it's worked OK for me. Main thing is to not be so fat one can't get all the way down and still breathe!

Looking at tall, long-legged pros, one is struck by the gap between thigh and chest with pedal at TDC. I think that's a function of crank length as much as anything.