I listen to music everyday and legitimately following that many artists. I see two ways for soundcloud to help with this problem:
1) increase limit of people you can follow, while watching the activity of the accounts so it's sustainable
2) let us sort out inactive accounts in the "following" tab, many artists have 10 different aliases, some of them are no longer active, others just stopped making music (althought there's always a chance they will come back)
Concluding the no. 1 is probably the best option.