Hi
Dragging the dots as Borate suggests is the way to increase the size of the "Bin" area, but as you may also be referring to the thumbnail line of the tracks (as your image suggests,) this has a limited effect if you have added text or titles which appear on the overlay track (Video Track 2). This immediately reduces the size of both tracks but (for some reason) leaves quite a wide "Drag and Drop" prompt area.
Provided you don't have anything of Track 2 (i.e. No Track 2) you can expand the thumbnails a great deal by dragging the dots up. With Track 2 in place you can't do much apart from expanding the track.
I think there should be a control that allows the user to drag any of the track edges up or down and in effect reduce the "Drag and Drop" area to the benefit of the track area. Just a thought.
PS I had a feeling this was mentioned some time ago...
Nat