Per Microsoft Technet: http://technet.microsoft.com/en-us/library/cc728305.aspx
When you enable shadow copies on a volume, you can specify the maximum amount of volume space to be used for the shadow copies. The default limit is 10 percent of the source volume (the volume being copied).
Setting the limit too small can adversely affect other programs, such as the Backup program in Windows Server 2003 and other backup programs that support the Volume Shadow Copy service. During the backup process, these programs create temporary shadow copies for consistent backups. The temporary shadow copies count towards the volume space limit you specify for shadow copies. If the available volume space remaining in the limit is too small, the Volume Shadow Copy service can delete existing shadow copies to free up space for the temporary shadow copy. If there are no existing shadow copies, and the volume space limit cannot accommodate the temporary shadow copy, the backup might fail.
To resize shadowstorage: