Thanks so much for your comment! I'm glad you liked the post, and completely agree with you on a few things; smaller groups are (a lot of times) very engaged.
I wish I could answer your question with complete confidence, however I feel like the optimum number of groups varies on different people. Personally, I am very active and engaged in two different Groups, but (and this might not be best practices) I am also a member of 2 others and do not engage at all. In those groups I like to be able to sit back and learn from others instead of constantly feeling the need to be part of the conversation.
I do feel though, that the 50 group limit that LinkedIn has established is far too high. I wouldn't advise anyone to have more then 5 or 10 groups because it's almost impossible to keep track.