Original thread http://www.gamesas.com/topic/1489195-the-bag-space-issue/
A bit more info - can only expand the bag to 110 slots and the bank to 100 slots, so even spending all that gold on bag/bank slots is not going to fix this lack of crafting mats space at all.
http://www.reddit.com/r/elderscrollsonline/comments/1xzqk2/i_am_isarii_of_tamriel_foundry_and_a_longterm/
Raising alts isn't going to extreme lengths for a hardcoe crafter, personally I don't mind doing this at all (I love making alts anyway) - just don't want to feel all my time is being taken up with the worst minigame in MMO history ever - the inventory micromanagement game.
They will need to fix this, I can see people complaining about this more and more as more people start to feel the pain a dedicated crafter type notices first under this system.
Again, what's needed is separate crafting mats bag space and separate crafting mats bank space, plus raising the stack size to something well over the current 100 stack size.