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The eeprom used on FX3 DVK is 24LC256, which is only 32KB, however, I found that even the minimum .img file size is over 120KB!! Is there a way to minimize the .img file size? If no, why Cypress used 24LC256 on the DVK board??
the 120kb is likely the lessest size. You may can use compiler optimization to reduce code size. You can change the I2C eeprom on the board, it should have a IC socket or you may use the 4Mbit SPI flash which is also on the dvk board.
The small eeprom is enough to tell the FX3 a customer specific VID and PID and to save some variables, but you may not really get such a huge I2C eeprom to save and load the application file. What you can also do with the I2C eeprom you can put on a bootloader for FX3, the bootloader is way lesser than 32KB in release version.