What do hosts do to keep log file sizes to a minimum while still being able to provide accurate Webalizer stats?

One host I get good webalizer stats and I never have to worry about log files taking up my disk space. I can't even find the log files in fact.
Another host the log files are 50MB+ for each day, and they'd take up all the disk space if I didn't manually delete them.

All you need to do is make sure that webalizer is running so that it doesn't look at the entire log (incremental). You can then develop an easy script that will backup each days log , gzip it and save it. You can then delete it if you want.

We keep the raw log files that are currently in use out of the customers hands but twice everyday we run the stats program for each domain and move the .tgz in their directory at the end of the day.

For some unlikely security reason, the web logs should actually not be owned by or writeable by the user. So we just keep the logs owned by the system user and that way they don't use the customer's disk quota.

Some of our customers log files would be twice their disk quota if they actually had to use their web space for the logs.

We keep two months worth of logs on hand too. This months and last months, so that users have a whole month to download last months logs before they are deleted.

Since they don't use the customer's disk space, and we have plenty of surplus space, there is no need to attempt to manage the size of the logs.