It's actually /lib/modules that takes up the space, and of course this
has to be under / for booting. I have a server in this position, which
had an adequately-sized / and separate /usr and /var when installed.
350MB used to be more than enough for a / which didn't contain /home,
/usr or /var. I don't normally keep more than one previous kernel
around, but there have been occasions where I have wanted to. I
understand now that a separate /usr is a no-no, unless I want to add
even more complication to grub2 (see below), so sizing / won't be an
issue in future.