I do 5 gallon BIAB in a 10 gallon kettle...Personally, I find having a ball-valve and a thermometer to be worth the investment, but it's not necessary to buckle down on if it's gonna beat your wallet up. I used a super cheap (like, $40) aluminum 10 gal kettle with a hanging thermometer for a while until I upgraded to the SS Brew Tech one I use now, and it worked great. Doing BIAB is also a great way to save some money, just make sure you know if you want to mash on the burner or with insulation before you hit your first brew day.
The only time I have volume issues is mashing grain bills that are heavier than about 16 lbs. (~1.081 OG) or so. However, there are other methods you can use (such as dunk-sparging) to make bigger beers at that capacity and still make 5 gallon batches. I'll also go on to say that I haven't had any boil over issues since I made the jump to BIAB.