I'm not sure the G5 would have ever made it in a laptop even if they did get the die size down. POWER4 is just big and hungry. It was big and hungry in the server space, and it was big and hungry in the workstation space. It just wasn't designed for the constraints of a mobile implementation.
The rumour I heard at the time, which I believe, is that PA Semi was actually in the running for the "next" PowerBook line based on some evolution of the PWRficient PA6T. Then Apple went Intel and bought them out later, so we'll probably never know.