I think it is possible to overdue the options, or more correctly you end up with one of two problems... either
{a} the world is shaped by the extreme variety and cosmopolitan atmosphere and you have no problem encountering a Troll in the farmers market. This makes it harder to exclaim 'it was a monster!' cause after all it might be the neighbors kid out for a walk.
or
{b} ignore the oddity of the PC and have the populace treat him/her/it as if its normal to have a Troll walk into the city... even tho him/her/it is the first one to do so since the invasion of the Troll King's army last year. This makes playing a Troll less enjoyable as you really are just a human with different stats.
IMC, which is set in Eberron, I apply the "kitchen sink with strings attached" rule. For instance, if you want to play a Dragon-born, no problem. However Dragon-born are all from the barbarian tribes on Argosean and only those exiled or on a religous quest ever leave... so which one are you? And by the way, most human will immediately fear you.
The same goes for any non-Khorviare native race or class. The world is not like the cantina at Mos Eisleys, altho there are some places that are. In many places you will stick out like a Wookie at an Ewok convention.... even when you are human.
When a new race/class is asked for, I figure out where it would logically fit into the world and how others would treat it. That said, at some times I do deny a class, for instance the current game doesn't allow War-Forged, mainly becuase they haven't been rediscovered yet by a group of heroes adventuring in Xendrik. But its possible that the group will be those heroes
So where do I draw the line? Its on a case by case basis on whether I can figure a place for the race/class/option to exist in the game world.