I firmly believe that the Honda Fit's seat position are designed to maximize interior cargo space. Therefore, the seat does not go far back and bottom seat cushions are shorter than say, your typical American or European car.

As a few people pointed out, the proper seating position in this car should be more upright (almost like driving a truck or van).

 

I'm 5'9" with 33" inseam (longer legs than most for my height) and have no problem fitting in z fit.

I have the steering wheel almost all the way down and pulled all the way out and my arms are not extended much because I like to keep good control of the steering wheel. I probably sit closer than I should for the airbag, but my primary concern is avoiding impact, not accommodating a passive restraint in case of impact.

I have the CVT, so I don't need to reach the shifter for 5th and once I'm underway I tend to recline back a bit to keep more planted in the seat. For freeway cruising, I also have the DIY padded armrests to get even more comfortable.