There are many companies that produce great FireWire and even USB 3 drives that go up to 4 TB for single drive units and much more with a drive array.
Check out the Qx2 drive at OWC.
Also, consider using Crashplan Pro E for backup. It may not as pretty as time machine but is far more capable.
You can even combine it with a SuperDuper! clone to an equally large drive.
That all sounds pretty reasonable. I'm just trying to work out how people "typically" setup large time machine drives because (obviously) all our data is very important to us. If we have to pay for a separate NAS just to hold time machine backups then so be it.
However if there's some cheaper way (like splitting it across smaller and cheaper USB 3 drives) then I'd be glad to know.