Part of the problem with heaters that are too large is that it become hard to manage the temperature. When a heater turns on it gets warm/hot and this heat transfers to the water. When the thermostat tells the heater to turn off it does. but this does not mean the heating element is instantly cool. The built up heat had to dissipate. When the heater is larger and the water volume is small, the heater will continue to warm the water. If you try to solve the problem by setting the heater to a lower temperature, you risk having the water be able to get cooler than you want.
How much of an issue a mismatch between the heater size and the tank volume is will be determined by how far apart the two are.
We have this problem with out guest house. The heater for the building is too big. The result is the room gets too hot and one has to open a window to let out the excess heat. This cools the room which means the heaters comes back on and overheats the room again. And this illustrates the second potential problem with using a heater that is too big for a tank. You can cause temperature swings. If these are too great, they will not be good for the tank inhabitants.
While some amount of heater over capacity is not a concern, there are no rules or handy formulas for one to plug in to figure this all out for any specific situation. Given the price of the Hydors (I have several), it can be an expensive "experiment" to see if you can get away with using one in your situation.
What I can also tell you is I have had 2/3 of mine for something in the neighborhood of 10 years now and they have never given me the slightest problems. During that time I have had other brands, some well known and respected, crap out on me. I even had one "boil" a tank. However, one is on a 50 gal and the other a 75 gal tank.
