My DD has way too many toys, although luckily for us we do have the storage space for them, but she doesn't play with them all so I don't see the point in keeping them. My mother recently cleaned out her garage and found loads of old toys belonging to my siblings and me which she then dumped on DD, despite the fact that most of them were ready for the bin (although the Barbies went down well with DD, and I was pleased to see my first teddy!). I mean hello, we did not need a 20-year-old bucket of Play Doh.
Right now I'm culling the baby toys - stuff that she has definitely grown out of. I will only keep anything of particular sentimental value - something that was a favourite or that was given to her by someone of importance.
Teddy bears and other soft toys is another good thing to get rid of. You don't need many - they don't do anything anyway and they're all the same! And they take up loads of space. My DD is only into toys that she can do things with.
I actually find that DD could manage quite happily with very few toys at all, provided she still had her art/craft activities (defo need the crayons and the colouring books) and her outside toys (trike, ball, golf set, sand pit and buckets/spades/etc). Her favourite inside toys are Lego/blocks, Let's Rock Elmo, her Barbies and a tea set. She's really into books and jigsaw puzzles as well. Aside from that though, I reckon I could give the whole lot away and she wouldn't care!!!