To disable this, and make the bookmarks bar go back to fitting a single page:
- Find the application shortcut for Google Chrome.
- Edit the properties of the Target
- Add --disable-new-menu-style after the executable name.
** Update - 7/18/2013
Apparently this has changed with the newer versions of chrome.
Now the correct flag for the shortcut is:--force-fieldtrials="NewMenuStyle/Compact2/"