This was done to eliminate USSR, as they would skew results, but I do see what you're saying. Stats can be used to prove anything as a few commenters have already mentioned.
I suppose this is just a fun piece to be taken at face value.
100% Usain Bolt has won this for Jamaica, although their track exploits do really have to be admired.
It would be great if there was a formula or some way of actually working out which nations were performing the best relative to size. This kind of thing would be way beyond me from a mathematics / statistics point of view, but I'd love it if the broadcasters or Olympics themselves could add in some kind of adjusted table to compliment the overall medal standings.
Of course it wouldn't be taken too seriously, but would at least give the smaller nations a bit more recognition.