Difference between OTel and other previous standards is that OTel was created by “modern” engineers that dont care about resource consumption or dont even understand it. Which is funny because thats what the tool is about.
So yea, cost of storage and network traffic is only going to balloon.
There is room for improvements and I can already see new projects that will most likely gain traction in upcoming years.
One of the biggest fallacies I see in this space is people looking at an observability standard like otel and thinking "I must enable all of that".
You really don't have to.
Throw away traces. Throw away logs. Sample those metrics. The standard gives you capabilities, it doesn't force you to use them. Tune based on your risk appetite, constraints, and needs.
My other favourite retort to "look how expensive the observability is" is "have you quantified how expensive not having it is". But I reserve that one for obtuse bean counters :)
When SAP swapped their mainframe era born GUI for a html/http based one, our Management was shocked about the tripled network bandwidth and how slow the system felt after the upgrade. At least functionality was on par.