I have a small, but well laid out an built kitchen. I have a knife drawer with built-in slots for my knives. All the slots are full, so that's what I own.
With a small kitchen, you have to be clever with storage, such as hanging lesser used cookware from a pot rack on the ceiling.
You also have to "just say no" to excess stuff, so in my case, yes, you can have too many knives.