I don't think you understand how the game works.
Everything you see - shields, swords, graphics - are all stored on your iPod. Things you do NOT see are not downloaded for you to store. This allows for a faster connection and game integration and enjoyment.
Think of what it would be like if the game were entirely server-side. You'd have to download every image, graphic, etc., EVERY time you saw someone with new graphics. The load time would be annoying.
Liken it to every OTHER game that utilizes graphics - either you store data on your PC, or you enjoy a long load time.
In the grand scheme of things, the Graal folder is surprisingly small.