So my FLGS is considering applying to host/run a Store Championship for this year but they are concerned about space. Anyone have some good estimates on the number of people we could expect for a Store Championship?

Your local player group would be the best source of info. We had 5 total in the "local" area, ranging from 14 to 42 players, but most were ~20 players. A regular event brings probably around 12-16 players out. If we were to estimate from that alone, I would say plan for double your local size.

You can always put a cap on it. I would recommend if you do so, make the cap at least 32. It bugs me when events are capped at a smaller number than the participation prizes, but that's just me. One of our local stores caps everything at 19 because they only have 9 tables, plus a bye... It really bugs me. IMO, if you can't support 32, don't apply for a SC. If you can't support a minimum of 64, don't apply for a Regional.