Now that looked disturbingly familiar. Even the minimizing on the tokens, although not taken to the extremes. I rather use fname than filename for example, out for output, x for the data input, n for counts, l for lengths and so on. lx would be length of x, ly length of y,... you get the drift.
Plus, as I often manipulate large datasets in scientific applications, I use the index facilities in R a lot. When I write out all those indices, the code hurts my eyes. So index becomes id, or even just i.
Even more, the specific loop structures in R (the apply family) often demands of function declaration within the apply call. In those cases I always use x,y,z,... These functions are often one or two lines, so it's clear where it's coming from, and it doesn't clutter the screen.
It's not a bad thing, as long as you have some naming conventions that are coherent through the complete code, and you supply comments to explain the more obscure variable names. In the end, it makes code more readible to me than a long train of camels hobbling over the screen.