That's one area where Namecoin was very weak. Its blockchain may have started out smaller, but its scalability is no better than Bitcoin's, and it'll eventually have the same problems (like all Bitcoin-based altcoins). But if your decentralized DNS doesn't include a currency, then old data about domain ownership can be more easily forgotten. For example, if you require that registrants renew their domains weekly, then resolvers only need the last few weeks of full blockchain data (plus headers to verify the chain). There may also be better ways of doing this that don't require frequent renewal. (You can also do this sort of renewal thing with BTC in order to reduce download requirements, but it'd be really unpopular.)