A one hour movie file is usually going to be around 300MB, but space is probably more of a secondary issue.
The recording would have to take place on the user's PC since graphics are not rendered on the gameserver. All but the very best PC's would most likely fail miserably in the attempt as it would become quite difficult to even play the game. Try using a 3rd party screen recorder and playing the game at the same time and you'll see what I mean.
A project like that would take an incredible amount of implementation for a feature that would probably only be used in very special circumstances. I seriously doubt that this would be in the cards, but I'll never say never.