GVFS helps in both dimensions, working copy and lots of history. For the lots of history case, the win is simply not downloading all the old content.

A GVFS clone will contain all of the commits and all of the trees but none of the blobs. This lets you operate on history as normal, so long as you don't need the file content. As soon as you touch file content, GVFS will download those blobs on demand.