Yeah, I defiantly think they need more room. Most breeding sites I've read say:
-Use a 10 gallon tank
- buy a breeding container and place the female in it in the same tank as the male so they grow conditioned to each other
- Feed the female lots of healthy foods till she is large and full of eggs (don't over feed though)
- When she is ripe, THEN place her in with the male
-Give the female lots of places to hide
After they mate, take the female out.
2-3 days after the eggs have hatched, take the male out.
Here's a good site
where I read lots of stuff on breeding.