The variety hits format requires a LOT of human attention to work well.
Jeff... you are absolutely right on this. Having done both, I can tell you that it's a heckuva lot easier to program a 300 song library than a 900 song library. With 900 songs 9or whatever), you have to be very careful to get the right mix because there are so many ingredients.
And from a listener's perspective, "variety" has nothing to do with 300 songs or 900 songs... it has to do with how those songs are managed. Are listeners hearing what they perceive as variety, or what they perceive as repetition? As you say, a poorly managed 900 title library can easily sound horrible.
In nearly every aspect of radio, human intervention is a crucial part of success.