No, pruning in ethereum means not storing old states (=results of executing all blocks at height H), not removing old blocks. As of now the bare blockchain + the state takes only about 20+2GB. It takes more on a live node due to db space amplification (45-50GB in parity), but that can theoretically get very close to 1x with future updates.
Smart contracts can have arbitrary state, but in general, yes. An archival node stores the state for each block which is only useful for block explorers and similar. That's indeed likely to take 1TB in 2018 - hardly a problem.
This is extremely widely misunderstood, one of those rampant FUD topics.
Archive nodes in Ethereum are almost completely superfluous.
An Ethereum archive node is not the same thing as a full node.
Archive nodes add zero extra security to the network. They are only useful for historical analysis of past states.
100% of the blockchain information is stored in non-archival full nodes.
The Ethereum system is a series of transactions that modify a state. The system is completely defined by the transactions. The latest state can be derived from them.
An archive node is a node that stores all past states for efficient retrieval.
...so, we're back to trusting a set of centralized parties, then? What if those get wiped? Altered (though that seems less likely)? Is such an archive a fork vector?
I wrote a blockchain explorer on Bitcoin as a technical exercise, and the intermediate state thing caught my attention, too. If all copies of a block disappear and all you're left with is a hash, what do you have? A complete blockchain?
