You can certainly raise too much.

Although, I tend to not look at this question from the standpoint of dilution, as much as the impact of too much cash on a startup.

One of the things that makes a startup successful is that it is literally fighting for its life. This helps ensure that resources are used efficiently and only essential investment are made.

The availability of too much cash can lead to people becoming complacent and losing the required sense of urgency required in a startup.

Having said that everything is relative. If you need $300K and raise $400K that is not a bad idea, because it always goes quicker than you expect. However, if you need $300K and raise $2MM that is definitely not a good idea.