Hi Tim,
It doesn't sound cheap at all, another one of the issues is that processing of a large file submission can result in a performance bottleneck and the possibility of timeouts during uploads which is not good.
I was faced with this with issue with Multimedia student at a previous employer and it was resolved with a third party repository that had a Moodle plugin (something a bit like eStream I suspect). There could be a more generic external repository that would help.
I work for Moodle Partner Titus Learning in Salts Mill, Saltaire and I suspect I could see where you are working if it wasn't for the houses in between.