How many is too many?

I got into an interesting conversation with someone about the subject of number retirement.  Part of it stemmed from Morgan Ensberg wearing #21 in Spring Training this season, that number having previously been worn by Paul O'Neill.  So we talked at length about whether or not the Yankees have retired too many numbers, and if the numbers being worn by some of the current players will be retired or not.  We also discussed whether the sheer number of numbers we've retired has cheapened the honor from being something reserved for the very great, to something reserved for the very good.  My theory is that the Yankees HAVE retired too many numbers.  There are some players who should not have had their numbers retired, Reggie Jackson is at the top of the list.  Mr. October notwithstanding, he wasn't a Yankee very long.  He played longer in California on two separate teams than he ever did here.  Getting a cool nickname doesn't warrant having your number retired.  At least not to me. 
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Of the current players (or former players of recent memory) whose numbers have yet to be retired, we have 2, 13, 20, 21, 51 and 42 for Mo, since it wasn't retired for him, rather for Jackie Robinson.  I don't know if 6 will get retired, and I don't know if it should.  You figure DJ will get his number retired, quite possibly Alex if he does what everyone expects him to do.  That leaves Mo, Paul O'Neill, Bernie and Joe Torre in the air.  Mo will definitely get his number retired, that one is a no-brainer.  I think the concept of number retirement is nice, it gives the teeming masses something to rally around, but shouldn't it be reserved for the very best of the best?  Look at other teams....the Red Sox, for example.  They had to make an exception for Carlton Fisk, because their rule was you had to play your entire career there in order to have your number retired.  I'm not saying we should do that ourselves, because by and large, the numbers we've retired WERE worn by players who were only Yankees.  Babe Ruth is obviously one huge exception to that.  That said, when you see how other teams reserve that honor for only a select few, it makes it more special, rather than something that is just to be expected a certain number of years after retirement.
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I think rather than retiring numbers, the numbers should be "honored".  This means they get a plaque and a little doo-dad, but the number stays in circulation.  At the rate the Yankees are going, players will have to wear triple digits.  Only the very best of the very best will have their numbers removed from circulation.  So what do you think?  Have we retired too many numbers?  What numbers would you downgrade to "honored" rather than "retired"?  What numbers of current players are locks for retirement, and what numbers should be honored?