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You can install as many as you wish until you have filled the disk. There's no reason even the lowest-end server can't accommodate thousands of installations.
Are you planning on anyone using these blogs? I'm no expert but I am pretty sure that the issue is server resources being used by people accessing the blogs. Theoretically a single high traffic blog can cripple your server. Since you made no mention of traffic I can only assume that this won't be an issue.
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