The "too large" is not disk space, but more related to the limits of it being a cgi app that opens the database each time.
sqlite also only allows a single writer per database, and even that is less useful than it could be. If you have a writer and one or more readers on the same DB, and the writer tries to modify a table while a reader is reading from it, the writer will fail.
Don't get me wrong - sqlite is great for small single-user prototypes, and it's certainly much better as an SQL engine than *spit* mysql, but it doesn't scale in the way that PyPI needs.
Unfortunately getting a PG instance up and running is subject to round tuit availability on the part of the relevant python.org folks.