I'm going to tell you guys a STORY!
When I was in college, I had these roommates, right? Their names were Annie, Melissa, Amy, Lexie and Kandice. We all lived together in this great suite apartment. Melissa and I were in the same bedroom. Annie rode a motorcycle and Amy played tennis. Kandice was an amazing knitter, Melissa was obsessed with The Beatles, and Lexie was really good at math. The six of us cooked meals together, had movie nights, and got along pretty famously for college roommates.
Yesterday, Kandice and I went to have sushi and we talked for two hours, because we are still very good friends and see each other on a regular basis. The end.
Okay, now I'd like to ask you guys something. Out of all these names, which was the only name you probably care about? Are you confused by all the names and wondering why I introduced so many characters/names when only one reappears? Do you feel like you had to go back and reread because you weren't sure which one Kandice was?
Granted, this is a very abbreviated "story," so it may not illustrate my point as well as I'd like, but the concept is there. Character overload. Introducing a lot of names in a short amount of time with little context and expecting your reader to remember who the heck you were talking about when you reintroduce someone later.
This can be managed if every character has a functional role to play in the story, but many characters show up to serve some sort of one-off filler function, and then we never hear about them again. That only really serves to fill up space in your reader's memory banks and confuse them later. "Okay, which character is Steve again?"
Character overload isn't unusual during the drafting process. We usually end up with way more characters than we actually need. Usually you can cut several second and third-tier characters and combine their role with another character. The goal is to make sure every named character serves a memorable function in our story.
Think about it. Do you really need to have a random girl named Carol warn everybody that the Monster of the Week is coming, or can you have one of your established characters do that? Do you need to introduce a new guy named Ted to ask your character out on a date, only to never use him again?
Named characters should be memorable. If you're planning on using a Random to serve a function in the story but don't plan on using them again, don't name them. Take a leaf out of J.K. Rowling's book -- even small characters served functional roles within her storyverse. Nearly every character served an integrated role in the story, or they had a distinguishing and memorable characteristic. We know exactly who Colin Creevy, Lavender Brown, the Patil sisters, Aberforth Dumbledore, and Bathilda Bagshot are, even though they serve relatively small roles in the Harry Potter series.
Your reader should never feel confused or like they have to go back and read an earlier passage to remember who a particular character is. Much in the same way every word should count, every character should count. Cutting beloved side characters is hard -- believe me, I know -- but ultimately might be necessary to strengthen your story.