S/he'd do fine in a tank alone. You could keep inverts alongside the damsel, and have a really interesting little tank. A 20g with a coral banded shrimp or cleaner shrimp, maybe 10 hermits of different types, an emerald crab, some hardy lower-light corals and macroalgae and one, bright blue and yellow 'centerpiece' fish might be a really neat little environment to watch.