When selecting keywords for optimization number of competitors usually is important. But how much is too much? If a keyword has 20 or 100 million pages indexed is this too much? So what is the max number of indexed pages under keyword so that seo is still worth doing?!?!?
Number of pages indexed is irrelevant, I'd be looking at the number of backlinks to all the urls on result page #1
Not exactly irrelevant, if you have a keyword with 300 million sites, it isnt going to be a walk in the park. Check age of competing websites aswell
Closer to what eXe pointed out, the # of results for the search term doesn't directly indicate competition. Do a G search for their and you'll find nearly 4 billion results. It wouldn't be too hard to rank for that term in just a few months (if you wanted to bad enough). Do a search for digitalpoint and you'll find just 1.4 million results. Try ranking #1 for that... ever... Researching the backlinks, on page seo, age, size, etc. of the top 3, or 5, or 10, or whatever placements for your search term is much more important.
You need to see how many sites in that field are actually performing some sort of on-site and off-site seo. You can check this through title tags and back links. That is your competition.