I'm not sure why I feel like this needs to be a blog post, when there's a whole book written on the subject that does a fairly decent job of explaining viewpoints from many different knitters. I'll add my thoughts anyway.
Stash, and the amount you keep as a crafter, is highly dependent on your personality. For instance, I am a collector. I love to hold on to memorabilia. I'm extremely sentimental, and I have a hard time connecting with people - it's easier for me to connect with my things, and they make me feel comfortable. I have a large stash! But it's not necessarily a bad thing. I have the space to keep my stash (although it does make it's way into living spaces regularly), and I enjoy using my stash as a palette for my projects. Some yarn I feel guilty about having, like the mound of acrylic I haven't used in two years, or the cheaper wool that I no longer use. I like having the highest quality in my stash, and I plan to have some of this yarn for the next 20 years. I need to destash badly, because sometimes the amount of yarn I have that I don't have plans for weighs heavily on my mind.
Other folks keep a small stash - they are travelers, don't have their own space, or are minimalists. I wish I was like these people! There's a lot of freedom in not having a stash. As long as you have the money, your stash is whatever yarn you want and can buy for the project you want to knit. On the contrary, I have to go stash diving for almost every project.
I think that the general consensus is that you should be mindful of your stash, and thankful for what you have. Do what makes you happy, and fits your lifestyle. If something is stressing you out, let it go. Don't let your lust for yarn get you in debt, take over your home Hoarders-style, or affect your relationships with worthy family and friends.