Should there be
that many cryptocurrencies that exists? Yes. I think so. Because competition matters. What I don't like is people being easily convinced to invest in certain coins/tokens just because of those dumb buzzwords like "x coin is the future of x". There should be competition. But people are taking advantage of this. Instead of making good competition, they scam ignorant people instead.
Why can't there be one or five cryptocurrencies that all projects can use?
Because not all projects are focused on being a for-transactions coin like bitcoin. Most projects are made for different purposes.