That's the hypothesis. I've done relatively ok through the various Panda updates with the exception of 1 site (2.5 years old, decent traffic levels and income). That site, since March has slowly declined in traffic despite ongoing linkbuilding, etc to date.
I have done nothing new (building-wise) on the site in > 30 days. So today, I merged or deleted 923 tags down to 13 to get rid of perceived "Thin" content to some degree.

If positive or mixed results on this site, will attempt to repeat on others. Anyone had similar experiences with regards to tag usage?