As DaWolf pointed out, this has been a great learning experience, for me at least. I started to ask how large should the log files be allowed to get and how long should they be kept when I realized someting that had not been mentioned. Some applications need more than one log file. There should be the error reporting log files for most apps, but some need seperate logs for each major function: email, data access/updates, user stats, etc.

Trying to cram all of that into one log file would make it harder to find needed info, but since they serve very different functions, they need to be saved for very different periods of time. Just in case some of the log files are used in a trial, you may not want some of that other stuff made public. (that's the paranoid part of my personality)