I started out this way, just buying what I needed for a project. As time went on though, while buying fabric for a project I would see other fabrics that I just had to have.
When I see a "must have" fabric I buy 3yds, other's that I really like I will buy 1-2yds. I don't have a huge stash, but I have enough that I have slowed down on buying "extras". :-D