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I just upgraded Xcode from 4.2 to 4.3.3. I then launches iOS Simulator (with "Hardware -> Device" set to "iPhone (Retina)") and the simulator now appears so big that the app page has literally to be scrolled!! (previously it was just right ...no scrolling needed). Even the 'Home Page' in the simulator seems to need scrolling! Here's the screenshot...note that the 'home page' has the scroll bar in the right and bottom) ...why is this? Shouldn't it fit exactly and not need any scrolling?
I have a 17" laptop that is 1920x1200 resolution, the newest iPad has a resolution of 2048x1536. The iPad actually had many more pixels in EITHER direction as my laptop.
The new simulator is DEFINITELY trying to show you all pixels, and most likely in a 1-to-1 fashion, which is most definitley going to take the simulator OFF SCREEN.
Pixel Density and total pixels is the answer!!!
You can use Command-1 or Command-2 to scale your view down. Also you are able to change your device to non-Retina iPhone/iPad in Hardware-Device.
My guess would be that the retina display simulator has a higher pixel density than your monitor but still attempts to show every pixel, so it has to take up more space.