I have about 500-600 books on my kindle right now, unread and purchased from Amazon. I also have about 200 samples and magazines. Total of 800 items. I don't keep read items on my device. But I didn't load all of them at once, they get loaded as I buy them now. Now I did start with a batch when I got my PW1, but I did it in chunks of like 30.
I have had no issues with freezing or anything else really. When I first got my PW1, coming from a K3, I had planned not to send all my purchased not yet read books to my new kindle. I tried to keep it low.
But then I just kept buying books.

Then I figured what the heck, I'll just put on everything I bought and not yet read on it again.
And here we are.
I have 658 MB free still. My numbers might go the other way, if I could just stop buying more books than I can read. But what would be the fun in that.
I will read them all eventually, I read 100's of books a year so its not really that bad. I buy when I get a bargain, so I really am saving money. Really.