I don't think that the data size should be a problem for daily data.The amount of data is really huge. My current backtesting engine keeps all data in RAM, which is a problem when I want to backtest a portfolio selection algorithm for several years and for several thousands of stocks.
Assuming 250 trading days per year, 24 bytes per market for date, open, high, low, close, and volume (4 byte floats each), 10,000 stocks, and 25 years of data you get 1.5 gigabytes. That still fits reasonably comfortably into a 2 gigabyte machine.
It's unlikely that you'd want to test 10,000 stocks for liquidity reasons so your actual numbers should be much lower.
Survivorship bias is indeed a serious problem, but I don't think it affects "traders" as much as "investors" since we are likely to be either out of the market or short markets for companies that go bankrupt.