Absolutely - there's no way that drive speed is going to be the bottleneck for handbrake - the processor is always going to hold it back more. Now, if you were talking about the speed to COPY the file, that might be a drive speed issue, because that's where you're going to notice the 5400/7200 difference the most.
I'd think about whether there are any other changes to the machine (more programs added etc) that might be causing it. Also, check that the processor is running at full speed.