the reason they are in such small containers in pet stores is becuase of the male aggression towards other males. betta's can survive on that much water just like you can survive in a 4X4 cube; however just because something can survive doesn't mean it will thrive. I've kept bettas before and while they will appear perfectly happy in a small jar, they are so much happier in a 3-5 gallon tank (or larger).
that said, this is about as fake as the kitties in jars hoax in my opinion.