Try formatting the drive, sometimes you'll get the original size. Ten years back there were many mp3 players with fake 1gb storage, which when formatted would show only 256mb.
There are plenty of legit companies selling devices that are legitimately those sizes, but you will pay a lot for them.
Of course, since flash media prices seem to drop by 25% or more every year, it won't be long before there are real devices at the prices of those fake ones mentioned above.