I don't think you can have too many listings, but if you have a lot I think it is super important to have well defined and thought out categories so it's easier for customers to browse your shop. I also think it's important to have items that relate to each other at least in some small way. There is nothing more disappointing for me then to find an item I love and then go to the shop to browse and find absolutely nothing like that item at all any where in the shop!
The best benefit to having a ton of items is that if you are good with your category choices (occasion, sections, etc.) and tags you can really boost your exposure!