Yes. The context windows just isn't there and small models can't really use a larger window even if they have it.
At this point local AI is better for helping you reason about your code than helping write it.
I actually think as tools get better and small AIs are trained more for tool use than for "reasoning" things will get better. You don't need a huge context window if the AI can grab the pieces and documentation it needs as it needs it. Couple that with some planning step where it takes notes and makes a task list and I think it can do cool things.