There are a few ways to reduce the data size by working on the conversion from CLDR data to ICU.
File selection: The most obvious size reduction is by only including a certain set of data files in an ICU build. File dependencies should be considered, and are partially enforced by icupkg. (For example, for each locale resource bundle, its parent bundle should be included.) The res_index.txt file should be updated (and res_index.res regenerated) when the set of resource bundles in a locale tree changes.
Translation selection: Even when files for a smaller set of languages are selected, those still contain translations for all the languages/regions/time zones etc. for which CLDR has data. Example: If only English (en*.txt) and Japanese (ja*.txt) bundles are used, they still contain display names for the languages French, Thai, Zulu and hundreds of others. A white list of such entities could drive both the file selection and the selection of strings inside the resource bundles. Intra-file selection would have to be done with the LDML2ICUConverter. Investigate whether it is sufficient to create a config.xml file for this.
Shorter keys: Even with key suffix sharing, ICU 4.2 resource bundles contain nearly 500kB of key string characters. (Most data is stored as key/value pairs.) It might help to use shorter keys, where they are arbitrary (that is, keys like "abbreviation", but not date/time pattern skeletons or transliterator IDs, nor otherwise data-driven, etc.). Requires changes in both the LDML2ICUConverter and in the runtime code (which should be able to use both the old and the new keys). For more about keys, see the Keys page.
Rule strings: Remove comments and non-essential white space. (Already done for collation by LDML2ICUConverter and genrb.) No runtime change.
Rule strings: Use more compact syntax. For example, in collation, a special sequence-of-primary-differences syntax like in CLDR. Addition to builder code.
Note: It is tempting to use fewer characters by replacing a sequence of ASCII characters with a single symbol, for example the collation tertiary difference "<<<". However, this may not help under string value compression which favors ASCII.
Enumerated values: In some places, we use strings to express enumerated values, for example, "FORWARD" and "REVERSE" in the transliterator data. Consider using small integer values instead, or compression-friendly short ASCII strings. Requires runtime change (should support both old and new values) and may reduce readability (which is probably ok). Size reduction may not be large because of string duplicate elimination and string compression.