pictures takes too much storage despite saved on cloud
Answering my own question here.  

Bottom line here is android users must manage their own pictures and videos storage.  

It is important to understand that the "Gallery" application (and probably the new alternative "Photos") is not synced to Google Plus, they are merely backuped; This means that Gallery does not deletes (leave a thumbnail) least recent used pictures to save space (as i mistakenly assumed).  

I, for one, will be using Google plus application from now on to be able to access all my pictures and videos and will be deleting images as soon as they are backuped.