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Mines pretty small I only keep a handful of games installed. I found if I installed them all when I got them I would bounce around and never beat anything. So I install a game play it till I beat it then uninstall it. Of course there's games that I keep installed even after I beat them, like Skyrim for example, but for the most part I uninstall games after I'm done with them.
Pretty much this. I use my old 120gb vertex 2 SSD for steam and I have about 10gbs left on it. so about 90gbs.
I own about 144 games on Steam, but only about 6 or 7 installed at the moment. Like the others, only have on what i currently am playing.
As for the sale, I haven't bought anything for myself yet, but have bought gifts for others off their wishlists.
If you have a decent connection and 128GB or 256GB SSD then this is pretty much the way to do it . Delete the local files for games you're not actively playing, I mean that's the whole beauty of Steam is its only 1-click to reinstall it, leverage that power.