Having too much square footage can have its drawbacks, but also positives.
Drawbacks: Increased mortgage and tax burdens, higher utility costs, more space to furnish, more space to clean (think bathrooms!), less usable outdoor space
It's also true that a home can be "too small".
Drawbacks: No space for family expansion, lack of storage, lack of space to entertain, lack of privacy
There are a few questions you can ask yourself when designing to help determine how much you "need". Do I entertain often? Will we have more children? Do we plan on living here for the real long-term? Do my hobbies require extra space? Do I need a home office? Will I have an elderly parent move in?