Cass,
I don't think there's a way to purge or archive the data, BUT you can limit the output of SHOW HISTORY using qualifiers. See:
$ HELP PRODUCT SHOW HISTORY
For example
$ PRODUCT SHOW HISTORY */SINCE=1-JAN-2005
or
$ PRODUCT SHOW HISTORY */VERSION=7.3-2
or
$ PRODUCT SHOW HISTORY */OPERATION=INSTALL
It looks like it would be useful to have a feature that says "ignore any INSTALL which has also been REMOVEd". If you have a service contract, perhaps log a case to request an enhancement?
A crucible of informative mistakes