More may or may not be better for you and will certainly hurt others more than it helps.
The problems is when more folks apply to more and more programs, those programs see more and more applications. That means, they have less time to look over them carefully which translates to greater emphasis on screening measures and just more competition per program period. You can argue that programs will only select those that they think will come to their program, but that becomes more difficult to ascertain as apps increase. Certainly there will be a number of "weaker" applications denied interviews because the competition is stiffer per program that would have been given an interview had fewer people applied. Of course, applying to more won't change the final match numbers (since the applicant to position ratio doesn't change) but it can and will affect where people get interview offers and thus your choices.
In the end the best strategy for you is to guage the "strength" of your application, get a sense (even if superficial) of whether you even want to go to a particular program and apply accordingly rather than applying to more just because it's only a few bucks more or just a few more clicks. The students that don't match are more likely to be those who failed to play the whole game right rather than those who just didn't apply to enough.
There is really no reason that everyone with step 1 over 240 should apply to 50 programs. If you have 240 but your grades are weak and you're having trouble getting recs, then go 50. (Even then, a general strategy of picking 15 or 20 that are APPROPRIATE matches for YOU plus a handful of safeties and reaches should make you golden. Most of you should not be afraid. Just play it smart.) But if your grades are good (even if not AOA), recs are outstanding and you come from a solid school, don't waste your money. (And all the shades in between.) It's not just a matter of saving a few bucks either; the general strategy may end up restricting your choices in the end.
-FB