I've not seen a need to limit library size, although for a practical limit I'd suggest about 400-500 songs. Some time back I did produce a list of just 100 songs to ensure we could play them all without serious practice, but it ended up feeling restrictive.
Also (for me at least) some songs 30+ years old are still fresh enough to bring, while others just a year old are already stale and past their 'use by' date.
I kind of do this already but not in a two-list format. New songs will get used 4-6 times a year since we're learning them. Good, fresh songs will get used 3-4 times in a year and "worn out" songs will get used 1 or 2 times in a year.
What gets defined as fresh is nebulous. We find that some "refreshed" hymns can be done several times even though they are very old songs.
As for the size of the library, if you're including hymns, it seems that 200 is easy to come by. However, if you're only doing contemporary, it's hard to get to 100 before you find quality songs that are all different enough.
I would say it depends on how many songs you do per week (including mid-week services). We go through 10 per week between Sunday and Thursday Services. I currently have 150 in my database, but it is growing since I am always looking for new-to-us songs. The newer-to-us songs do get played more frequently and the the old standards for us are spread apart more.
I try not to repeat a song more than once per month unless it is a new one that people are learning...then it's 2-3 times in that first month. Ideally, I like enough to not have to repeat a song within 2 months, then I can pick and choose which get played more or played less. I think if you don't repeat hardly any songs in 3 month period or longer, you run the risk of people not learning the songs very well (particularly newcomers), but every church is different and every library is different. That's just what I've found with us.
There are some songs in our repertoire that I have had to retire for 6-12 months due to being worn out too much, and I rotated in new songs when I retired them.
I would say regardless of what size your library is, never stop looking for new-to-you songs; although theoretically if your library is large enough, you probably could rotate some in as if they were new, and people might think they were.
I would argue that if your library is that big, you technically don't need to search any more. But if you don't search any more, I would say that you'll lose effectiveness.
"New to you" - perfect.
A and B list sounds good. And about 80 current songs sounds like enough to cover a variety of subjects, yet get enough repetition that people don't start saying "I liked that new song" when it's the fourth time you sang it.
Personally, I wouldn't totally toss anything except the really ludicrous. Keep an archive.
We had well over 250 songs in out 'current' list, some of them reaching away back to early 80's. I wouldn't toss anything normally, it's nice to have options with some of the older music but some of those older songs, ones we have played for years, seemed to dictate our "sound" because we've played them for so long. I've pruned the list quite a bit, and as well as introducing new songs we are going to work on injecting some new life into some of the older ones in an effort to create a more consistent sound.
A closely related question would be, "how do you determine your list, and how it evolves through the years?"
* Need for feed - good, healthy music for the congregation
* Need to seed - music that is attractive to outsiders
* Your personal (individual and group) love for the music/lyrics
* Pastor's input - his preferences, his joys, the themes he espouses in messages
" Congregational input (songs they like, songs individuals request)
* Seasonal needs and church year (especially if your church observes a church year other than Christmas & Easter)
* Particular seasons the church is going through (hopefulness / mourning / joy / peace, etc.) which might be addressed with song.
* Do we need songs in multiple keys, for various leaders, or for various effects during the worship service?
And who knows what other questions.