You could make the argument that if all of the capital in crypto only had to be spread across 50 coins that that would make each of those coins extremely more valuable. In light of that thought, is the huge variety of Altcoins ultimately a good or bad thing for crypto?
Crypto market is open for all, it may be a good or bad side of the crypto market. Too many coins won't be a negative thing for the market as they may bring good competition in the market. The only thing not good for the market is useless coins that are launched with only intention of stealing investors money.