We have in the past moved towards more sensors for easier troubleshooting. For machines operating in a "difficult" environment, we found we got more defects/errors and they were harder to track down. Quite the contrary of what we were aiming for. At some point, most of the errors you get are sensor defects (either the sensor itself or the cabling). Since then we have backed off, limiting sensors to what is critical for the process at hand. For our customers, most of the time less sensors is a more reliable machine. This depends very much on the environment and the process though.
You see a similar thing with cars in the last one or two decades. Cars with lots of electronic monitoring tend to have more defects. In the electronics, "ghost" warning signals while there is actually no defect. Some (mind you, not all) "cheap" lines or brands have proven to be significantly more reliable than upmarket models stuffed with electronics. If it is not in there, then it cannot break.
I agree with you that there is a point in not having more sensors than needed however cars is a very bad analogy because compared to industrial machinery a car is a pretty crappy piece of machinery and very cheap too.
The industries I worked in where failures matter are all running 24/7/365. Every valve, every pneumatic cylinder, every circuit breaker, every VFD, basically everything has some kind of sensor on it so there is some kind of way to detect an error. Sometimes there is a sensor problem but the most common reason for that is actually mechanical (mounting) or purely using the wrong sensor for what you are trying to detect. The cost of putting a sensor somewhere is much higher than the cost of the sensor itself so they always use high quality stuff, no no-name china stuff.
BTW, just recently I was looking at the maintenance history of a machine that has been running round the clock for about 15 years, that's roughly 130 thousand hours of operation. In those years about 5-6 sensors (it has photoelectric, inductive, laser, ultrasonic, magnetoresistive sensors and pulse encoders) had been replaced. I estimate it has a total of around 100 sensors of this kind. Then there are about 100 input signals from circuit breakers, isolator switches, VFDs, contactors etc. I think the failure rate is very acceptable.
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