There is a modeller in Germany who has built scale midget subs at 1/72nd scale, with working torpedoes! They include subjects duch as Seehund, Delphin, Biber etc. At this scale these boats are tiny.
Rick Palumbo at RPM tech is also making some tiny 1/96th scale submersible boats. He's already done an Aluminaut and is working on a Shinkai. He's detailing these builds on Mike Caswells forum.
R/C equipment and batteries are very small these days, and really the only limit, size wise is your ability to build.