While it’s probably ok to have this list be ever increasing in size, given we currently have a 256 block limit on block hash it seems sensible to put an upper bound on the history stored. That should be as simple as using sstore(HISTORRY_STORAGE_ADDRESS, block.number - 1 % 256, block.prevhash) for storage and sload(HISTORY_STORAGE_ADDRESS, arg % 256) to load, preserving the current checks that arg < 256.
We could still increase the limit from 256 if desired but avoiding the assumption that history will be available indefinitely seems wise, especially since the ETH2 history only preserves a limited range and it’s unlikely that ETH1 will be moved into ETH2 within that timeframe (~13 hours). Otherwise we risk it becoming a backwards incompatible change when moving to ETH2 or being stuck storing unlimited block history forever.