First, I completely agree that once mailboxes have been trimmed to 50, I hope the developers allow at least 5 weeks for us to open the mail instead of 3. We may love DDO, but unfortunately we cannot physically open a portal to Eberron and truly live there. (I suppose this is best since this would create problems of its own, including increasing lag.)
Second, perhaps a compromise would be offering an ability to buy more "mail slots." VIP could maybe get an automatic 50. (Note: I am not VIP and would actually not become VIP for this, but it seems like a lot of the VIP feel especially hurt by the decision to trim the boxes, so this might be a good compromise.) Then, other players could use TP or maybe an additional 50 (or 25) could be a favor reward. Just like bags and bank space, there would be an upper limit on mail (maybe 200 for VIP and 150 for others).
Again, I do not have thousands of letters and am slightly in awe of those who do, but I can definitely see that 50 mail limit being reached. One of my characters is a guild leader, so after sending out stuff for that (and sometimes getting it back because the player has not logged in), and posting items on the auction, I frequently hit the 50 limit max. (Keep in mind, if you post 40 items on the auction, you will get 40 pieces of mail whether you sell it or not.) I do not have this problem with any of my other characters, so I see it as being something unique to the way I use the character of my guild leader and the frequent communication with others in my guild that this requires.
As to favor notifications, yes, I like those because you do have to find a person and talk to them. It is the same with TP- I don't want to keep opening the DDO store to see if I have earned it. However, once seen, these can generally be deleted immediately- especially those with TP. The way we have to delete mail (without a "delete all" button) is clunky. That in itself might keep people from easily purging their inboxes.