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Good design doesn't mean "put everything in smaller containers." Chrome uses distinct rows for tabs, addresses, and bookmarks because each field can contain a lot of information.
Thats true, but wasting space with a container that's too big and almost never fully used is also questionable. And a lof of information can quickly become to much information so having a lot in bookmarks there doesn't seem practical to me.

I just tried this and it works well so I'm sticking with it.

Better yet, put the stuff that's not related to what's on the tab (like bookmarks) OUTSIDE of the tab. Then I don't have to explicitly hide my bookmarks every time I capture a screenshot of a browser.
What happens when you want to navigate to a bookmarked site from the current tab?
Short address bars make it easier to use fake urls. www.google.com.evilsite.com
This is true, but even if you add half a screen of bookmarks you will still get at least 600pixels left for the address bar, more than enough to identify fake sites.