I really like him but I'd rather give him away to a good home than see him die in my care.
Kudos to you. This is possibly the most mature statement that any pet owner can ever make. (I wish my father had come to this decision about his cat a few years ago. That did not end well.)
I think that you've found the best course of action here, and even though it will be hard for you, it's worth it to find someone out there with a tank that's 2 feet or longer, to see if this little guy can make it. Talk to the petstore about taking him, or else helping you find an appropriately sized home, or post on forums like this one to see if anyone in your area could re-home him. Ask around, to see if your friends/family know anyone with a large, freshwater tank. The sooner you start looking, the sooner your guy can get used to his new digs.
