I agree that the OP should specify the full command and error (thanks Istvan) - but just in case this helps:

makeblastdb gives an error if there are any tabs or other weird characters in the fasta file. Check your sequence headers, and replace all weird spaces with ordinary spaces.

I use the following:

perl -i -plne 's/\s+/ /g' sequence.fasta

That is not an overly large file to make a blastdb from. Most vertebrate genomes are that size...granted you will have millions of reads compared to dozens of chromosomes.

I tested making a blastdb on a short read file of similar size and it was fine. Nothing special..

formatdb -pF -i short.read.fa

What type of error are you getting specifically?