Like so many other questions, this one has the frustrating answer of "it depends." As you'll likely suspect it takes more webserver processing power to parse through a larger .htaccess file. Apache will look in the directory being browsed for an .htaccess file and will traverse up the directory structure until it finds one, stopping at the first one it locates.
I notice you have php extensions on your file names. Do you have other stuff in an existing .htaccess file? Examples would be blacklisted IP addresses and referrers. If so, placing 301 redirects in subdirectories will effectively bypass those other instructions unless you duplicate them in all .htaccess files.
Unless you have a whole lot of general configuration details in a top level .htaccess I recommend putting smaller ones in logical subdirectories. You wouldn't have to generate them for every single directory, but you'll want to try and keep the number of evaluations to a comfortable level. I don't have any data in front of me but 1700 seems like quite a few. I am going to throw out an arbitrary number and say that I wouldn't recommend more than a couple hundred per .htaccess file at most, and even that number seems a little high to me.
Edited by pangea33 on 05/29/09 02:39 PM (server time).