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Number of blocks really depends upon what client wants as we work on client sites and do not work on sites operated by us, though there are sites where clients have prepaid support with us. We normally avoid any layout with more than 40 distinct blocks on any template. As a thumbrule, the total number of CUSTOM BLOCKS that one would really need to do is ~2.5Xcategory-counts (could vary between 2-3). We never work with standard blocks unless it becomes really unavoidable in certain cases.

The number of blocks in http://www.littleindia.com/news/158/ for example is just two with client needing to adjust the count in one custom block as new issue goes live. Home page has 27 blocks. On odisha.in they are in general 30-37 blocks on home and category templates.
Do you find that too many custom blocks has a negative impact on the server performance?
Depends on templating, site structure and DB size and of course server setup. We have seen no issues with sites doing 100GB/Mo even on shared hosting for all the sites that we did. A lot really goes into planning and that's why I have mentioned somewhere, we delete just about everything from default install and start afresh on everything.

That said, with latest patch running there are huge improvements wrt same resource being able to handle more traffic unless of course if site is being updated every minute.
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