Yeah, I'm having the same issue. My LG Optimus only comes with 180 megs of internal memory, so space is at a premium. Google Music has 16793 tracks uploaded, and regardless of whether I cache or not, it takes up 14.41 mb in data storage. On top of the 7.30 mb of application, it's by far the largest app on my device.
I wish there was a move-to-sd option, or that GoogleMusic would store data on my card instead.