sqlite storage db is rather large

This is mainly due to the fact that the Qt's Sqlite interface uses UTF-16 to store strings in the database. The size should shrink to about half of the current size when other storage backends like postgre sql and mysql will be introduced.

Besides that, you can compress the database by rebuilding it. This requires the core to be shut down. Run the following commands:
sqlite3 ~/.quassel/quassel-storage.sqlite .dump | sqlite3 ~/.quassel/quassel-storage.sqlite.bak
mv ~/.quassel/quassel-storage.sqlite.bak ~/.quassel/quassel-storage.sqlite

Note: this method seems to be way more effective than sqlite's VACUUM function.

Thanks to al_ for bringing up that idea.