In my younger years, I was all about go big or go home. Recently it seems that I've crossed some invisable threshold into a new world, and I'm trying to lighten and shrink the load.
So, to answer your question from my new middle aged perspective, I usually do a little of both. Right now, for example, I'm thinking about creating a new kit of urban/subburban outtings. I've got a list of stuff I want to carry, and am going to find a bag that it will all fit in. My goal is to keep it small so that it doesn't become my traditional unwieldly overkill.
That said, I have no doubt that no matter bag I ulitmately choose, I'll fill the nooks and crannies in it in no time. Hopefully I'll keep my head this time though, and leave room for the treasures my son usually finds along the way. My goal this time is for "Mom, can you carry this for me please?" not to mean I have to get a bigger bag.