There is one functional reason. The more contents a single folder has, the more likely you'll get data corruption. A more smart system keeps your data backed up on a regular basis, instead of using your external hard drive for additional storage*:
http://www.macmaps.com/backup.html
And then once you are certain you don't want the data on your drive to be taking up space, you burn it to CD or DVD at least twice, or keep it on a second partition of the hard drive as well as a CD, until you are ready to get rid of it. Keeping it in just one place is risky. This is especially true since you can always accidently empty the trash on the only copy of important data you want to keep. Once you have agreed to maintain a good backup system, I can give you instructions on how to empty your trash. Because there is always risk if you don't do it.
- * Links to my pages may give me compensation