The storage files are database files. Deletes don't actually delete, they just free up space that other headers can use. At some point the size of the group will steady state as old records are purged and new records are added.
If you want to make the file smaller, you'll need to reduce the "Storage Age", update the group (to force it to delete records older than "storage age") then do the "Compact Group". It does something called a "vacuum" which essentially makes a copy of the DB then then re-writes the db from the copy. "Vacuum" will improve performance too.
You can do it from the display or you can go into the group folder itself using a dos prompt and manually vacuum using the "Sqlite3.exe" tool which is installed into the Newsbin install folder.
http://www.sqlite.org/Tools to manipulate the DB files can be found here. If you do it manually, you'll want to vacuum both "Storage" and "StorageData" db3 files. You could even copy the DB3's to a different machine, compact them, then copy them back if space is tight.