The answer, I think, depends on how important you think the subject of the biography is. If, for example, you think Tolkien is an interesting but not major figure, then a book like Carpenter's biography (which manages to cover eighty years in less than three hundred pages) is about right. If, on the other hand, you think Tolkien is the Author of the Century, or at the very least one of the most important writers of his time, then the 2298 pages of Wayne & Christina's J. R. R. TOLKIEN COMPANION & GUIDE is manna from above. The same, I think applies for collected letters. Modest volumes of some 300 to 400 pages seemed about right for C. S. Lewis and J. R. R. T. a few years after their deaths (i.e., the 1966 LETTERS OF C. S. LEWIS ed. by Warnie** and the 1981 Carpenter/Christopher edition of LETTERS OF JRRT), whereas now Lewis is represented by the three-volume COLLECTED LETTERS (just shy of four thousand pages) and a similar collection cd no doubt be put together of Tolkien's correspondence.
HPL himself got what seemed the full treatment relatively early on, in the form of a huge five-vol. set (with each volume clocking in at around 400 pages). But even this was highly selective, extracted from Lovecraft's epistolary logorrhea and representing only about 5% of the surviving letters (which in turn represents about one-fifth of all the letters he actually wrote). And it cd be justified by the fact that in addition to his fiction Lovecraft was just as important as a behind-the-scenes influence, encouraging younger (Barlow, Howard, Bloch, Derleth, &c) &/or better (Smith, Leiber) writers. More recently, Lovecraft studies has seen the release of single-correspondence collections -- for example, all his letters to Kuttner, or Derleth, or Barlow, each in its own volume. Most of these were sold in tiny editions from small presses, but still collectively they're an enormously valuable primary source for any Lovecraft scholar; Tolkien scholars can, for now, only dream of such treasures.
The best piece I've ever seen about matching the length of biography to the relative importance of the author came in the Introduction to Norman Page's biography of A. E. Housman , which in fact I bought because in skimming it I was so impressed by his argument. Page argues that only a few major figures deserve the full-scale treatment, while secondary figures, like Housman, are best served by shorter, less exhaustive books. As a example, gives a paragraph describing the kind of shoes Housman always wore, then follows this up by saying that every word in that paragraph is true, but none of it is worth knowing -- hence, for the rest of his book he avoids such trivia.
So, in the end it's a circular question. In some cases (e.g., Jane Austen), the relative lack of information will hold the biographies down to a certain length. In others, reticence on the part of the authors & their estates (e.g., T. S. Eliot) will do the same, at least for years and years after their deaths. But in some cases, because of the enthusiasm of the audience, we'll get massive amounts of information, whether their subjects are worth it or not.*** It'll be a boon for those interested in the subject, and those not interested can just ignore it. That makes it a win-win situation for all concerned. Except, perhaps, the trees.
*rather oddly titled 'I AM PROVIDENCE' -- which wd have come as a bit of a surprise to HPL's fellow citizens of that Rhode Island town, most of whom never heard of him.
**although what was published was entirely re-edited by Christopher Derrick, a fact unknown to the public for several decades.
***for example, is Dorothy L. Sayers really worth a five-volume set of collected letters, which is roughly equivalent to the treatment Virginia Woolf got? The letters' publisher didn't think so, bailing on the project mid-way through, so that the latter volumes had to be published by other means