Oh goodness, I have way too many books. I love books. I love to read and I love my kids to read and I love to read to my kids and it's a vicious cycle! ;) I know I have too many and it's rare when my kids ask for a book that I don't buy it, toys and candy are a different story, but I always buy books! I'm a sucker, don't even give me one of those Scholastic book orders!
About a year ago I finally had to weed out some books. My daughter is 4 and my son is 2 and I was forever keeping books that "someday" my son would read, but I had to let the dream go. Of course the classics and super favorites I keep and will probably keep a lot of them even as my kids grow up, but I had to start donating, because they keep coming in.
As far as keeping them organized, each kid has a shelf (my daughter has 2) in their rooms and we have two other designated book areas in the house. Books must be picked up and stored in one of these locations. Sometimes they get strewn about from general use, but we just pick them up when we pick up toys, etc.
I do know someone who groups her books by season and just rotates them every few months. That works for her, although I'm not that organized. Do what you have to do, but at least you're fostering a love for reading, right!? :)