There is one obvious answer. If the altar only fits a handful of people, you'll have to limit your number of bridesmaids! But, seriously, the first rule in determining how many bridesmaids is right for you is to coordinate the size of your wedding party with the size of the venue where your wedding is to take place. Although it may be difficult to choose five bridesmaids from among fifty of your best friends, you must if you're having an intimate wedding. And there are plenty of other great honors that you can hand out to close friends who want to participate in the wedding (e.g., they can help coordinate any other wedding-related activities, or they could write a special song or toast for the reception, etc.).
A good second rule is to consider the formality of the wedding. In general, formal weddings have a half dozen or more bridesmaids in addition to the maid of honor (it could be as many as a dozen, but that is very rare). Semiformal and casual weddings can have just one bridesmaid - the maid of honor - but typically have about three to five. And don't worry if the groom has more ushers than you have bridesmaids: Ushers can always double up in the recessional. Of course, the final decision rests with you, the bride, but remember that the larger the number, the more difficult it may be for you to manage. And remember that the bridesmaids will all have to work together on many aspects of planning, so addressing any conflicts up front will avoid problems down the line. So the more the merrier? or too many cooks spoil the broth? you'll have to decide!