I think the storage size problem is fundamental to timescale DB; it's a row-based storage engine, and hence will use much more storage than a column-based system, as well as being much slower to query for typical use cases. However, you *should* be able to read and write to it via prometheus: the postgres/timescale adapter supports both remote read and remote write. If you can't, then it's probably just a configuration issue.
If you're looking for a more scalable solution, I'd recommend you look at VictoriaMetrics, because it can start as a simple single-process system, which may be all you need, but you can change to a horizontally-scalable distributed system later if you need. There are some benchmarks here (from author of VictoriaMetrics):
Thanos/Cortex are other well-known big players in this space.