Yesterday I run into this problem: "INSTALL_FAILED_INSUFFICIENT_STORAGE" while trying to install application via cmd.
There are how-to's on the internet how to fix this "error" (most of them for Eclipse), but unfortunately none of them solved my problem, but at least pointed me into the right direction.
I had 3 problems:
1. Install application via cmd (without using Eclipse)
2. "INSTALL_FAILED_INSUFFICIENT_STORAGE" error
3. and third one, not really a problem, but it become one, I have installed JavaFX runtime which also has "emulator" application and was already in the "path" environment variable.
The solution is simple:
>"D:\Program Files\android-sdk-windows\tools\emulator" -wipe-data -partition-size 1024 -avd HTC
Replace "D:\Program Files\android-sdk-windows\tools\emulator" with path to your Android tools directory,
and replace "HTC" with the name of your Android virtual device
Now you will be able to install bigger applications into the AVD via cmd.