Too many games is when you're spending more time and money hunting games to increment the counter next to All Games in your steam library, and there's better ways to spend your money.
As it stands, I had my account on steam for 2 years- a year of that only having Fallout, Fallout 2 and Fallout Tactics on it.
In the past six months, thanks to a number of bundles and things from the Summer, Autumn and Winter Steam sales, I've taken that number 491... and I'll probably have another dozen games before the end of the week thanks to a new Bundle Stars bundle, another 3 games to be added to the January Indie Gala, and maybe a random one if steam has a good sale or if Amazon pulls out something amazing.
All told, I've spent less this month on steam games than the cost of ONE retail console game. I was wondering the same thing during the Christmas season when I saw my steam library jumping by leaps and bounds. As such I've been keeping a budget spreadsheet, and so far I've still spent less than even a 3DS game, all while adding 20+ games to my steam account. (Including Starbound, which if you didn't get through the Humble bundle would be half the cost of a retail 3DS title anyways.
Don't forget that come September, Steam will be adding in the Family library sharing... that's been something that's reminded me that there's extra value to this... while I could share my console games with my friends and family, it'd require handing physical media around, shipping it cross country, internationally... but as soon as that gets turned on, I can grant them access and easily share a giant library of games- and still get full value out of them myself.
Typically, I check here or reddit every few days to make sure I'm able to get in on every interesting bundle, even if it's just at the $1 tier. Typically anything higher than that will depend a lot more on the contents. Basically, almost any game that costs 50 cents or less and looks at all interesting gets picked up.
Steam sales are mostly for picking up things I'd been meaning to but didn't want to spend full retail on.. for example, in the Winter Sale I picked up Spelunky, Guacamelee, and then a number of things that looked interesting and hit 80% or better (Like Super Hexagon).
I'm still tracking my spending, but between never actually buying anything less than 50% off and the ability to even make a little bit back or fund some other games makes it pretty easy to make money stretch a LOT further than spending it on console or full retail pc games.