Mountains look small

Today I have been skiing in Breuil-Cervinia, in Italian Alps and I have been noting how small the mountains around me looked. Mount Cervino is 4450m tall and the place I have been skiing was at 2500m of altitude. The scenario was similar to the one in the pic beside. No way I could perceive that the peak of the mountain was 2000m (7000ft) above me. I’d rather state that the mountain was at the most 700m higher than where I was.. but by no means I would say that there were 2000m of difference.

I have the feeling that this would be very easily explained if one assumed that the distance (or depth) of the mount is severely understimated: a 2000m mount at 10km of distance projects the same retinal image as a 1000m mount at 5km distance. I have no clue whether this line of thinking makes sense or not(*), however, if all of this were true, it could explain other phenomena, such as Moon Illusion and Dynamic Parallax.

Has anybody ever investigated perception of distance in natural settings (i.e. several kilometers)?

(*) at best one could find data which fit with the concept of distance and size-distance compensation however that is not a proof that such mechanisms do exist..