I'm not so concerned of the size of the blockchain once it's downloaded. What's more concerning is the bandwidth required to download it. Internet speed (for most) is not keeping pace with the increase in size of harddrives. I personally just got 1MB/s at home and I have cable. That's still a large amount of time to download a 17(?) gig file. Not to mention data caps.
This would be another benefit of low-costs single-purpose plug-and-play bitcoin node hardware. Rather than downloading the blockchain from a single peer node (as is currently the case), the card could come pre-loaded with the blockchain (or you could choose to download it from a faster torrent).
The microSD card could be partitioned to contain a section for storing the growing blockchain, and another section for storing the bitcoin binary that gets bootloaded by the ARM-core processor. You would update your bitcoin program by copying the new binary compiled by a trusted source onto the card.
You could probably do some other useful things too. If these devices became cheap and simple enough, they could come as part of bitcoin miners with added firmware to run P2P pool by default. So you just plug your miner in and immediately it begins mining at P2Pool. The "configuration details" such as where the mined bitcoins get sent can be specified in a simple text file on the SD card. Alternatively, if these devices become cheap enough, they could be an integral part of bitcoin point-of-sales devices in the future.