Storage space should be increased, you already allow close to infinite muling, the only thing a PlugY-like inventory would do for multiplayer/single player would be to erase the annoying steps of having to move items from 1 character to another, have you seen the trade threads? they list everything of value, which is quite a lot of items, certainly more than 1 character worth of space in most threads.
Muling isn't fun, but if i find an item i want to keep, im damn sure going to mule it, not toss it away cause "oh well, no more inventory space!" it's just silly the way it is right now imo compared to when PlugY worked.