Is it not possible to use this as program space?
No, the program must reside in the flash on the microcontroller. But you can store any other information there, as strings, values, any kind of data.
You suggested saving space using a print function.
No, you are currently using the print() method. But if you use the F() macro for constant string parameters for that method, you're saving RAM. Example:
Serial.println("connected");
gets
Serial.println(F("connected"));
Nothing more to do and this change saved you 10 bytes of RAM. Not that much for a PC but a microcontroller with only 2048 bytes of RAM this is almost half a percent. Guess the savings if you change all constant strings this way.