Yes, it is very annoying that they are taking up space. I will up my item space to 1500 in the next few days (currently at 1300), partly to accomodate for rare candies and all the other new goodies.
Overall, I think the best call is to hold onto them for now unless you really need them for a task at hand. Legendaries are probably coming and rare candies are the obvious way to power them up. Otherwise, gen 3 should also be coming soon.
Personally, while I have enough Porygon candy to evolve a Porygon 2, I'm waiting for Porygon Z and only then evolving my best Porygon, as the candy is very hard to come by.