Is this a size doesn't matter scenario? Is a handheld DVCAM camera really the same in terms of quality as a shoulder mounted DVCAM camera that's almost four times its size?

It's not the size and weight, but what's inside. The shoulder mount cameras generally have much larger CCD's (2/3" or 1/2"), lenses costing as much as (or more than) $10,000, high resolution CRT viewfinders and transports that take the large tapes for longer recording.

The smaller "handycam" cameras typically have 1/3" CCD's, small tape transports, relatively low res LCD viewfinders and much less expensive built-in lenses.

So "you get what you pay for," but the more difficult question is whether the higher quality of the shoulder cams justifies the large difference in price.

Not a simple yes or no answer. For a straightforward shot, in reasonable light, the answer may be "almost". When the light starts to go down, the larger camera will give an acceptable picture when the handheld just gives out a pile of mush. The larger camera will also be better if an extremely narrow or extremely wide angle of view is desired.

May be better to say that a large shoulder mount is far more 'versatile' than a small hand held, and maintains the quality under a wider range of conditions.