I would never, ever recommend a 'true' limited inventory in an RPG, because collecting and accumulating things are part of most RPGs' appeal and also because making painful choices between which item to keep does not usually contribute to combat strategy. More simply put, it adds more frustration than fun to an RPG.
With that being said, it can be very reasonable to add a 'short-term' limited inventory system to games where you want to add a chronic type of challenge (challenge from dungeonwide management of resources rather than challenge from each single battle) to your dungeons. To do so, limit either the number of items that a player can take into a dungeon, or the number of items that a player can hold at once inside a dungeon. This is especially good in games where you want to limit how much progress the player can make in a single in-game day - e.g. Persona, Azure Dreams, Recettear, and Rune Factory. But allow them to keep their other items stored in a permanent storage outside of the dungeon, so that they can still feel the joy of collecting and accumulating things in the larger context of your game.
Remember that even if you're successfully adding chronic challenge by adding a short-term limited inventory, you're also adding a slightly tedious and frustrating mechanic, so only use it if your game truly is much more interesting or more well-paced by adding this mechanic.
For games like survival sims where your inventory is going to have a huge influence in how you deal with different situations, the limited inventory (even a 'true' limited inventory) makes a lot more sense. But for RPGs - there need to be other gameplay dynamics that really call for it; otherwise it's going to do more harm than good.
