1). If you were in my shoes, what would you do?
I like the idea of selling a lot of mediocre stuff and buying 2-3 really nice kits.
2) If you did decide to go the consolidation route, how would you choose to sell a massive amount of gear? I know Reverb/Ebay is viable, but what about possibly contacting a local drum shop that would have the capacity and knowledge to deal with the gear and maybe do a "bulk sale" (Jim Rupp's place, Columbus Pro Percussion, is less than 2 hours from me). Would you pursue that route?
On one hand...
First, I'd ask your drummer friends if any of them would be interested in buying a kit or if they can spread the word that you are getting ready to start selling.
Second, I'd list every kit on CL in your state. Let the locals cherry pick what they want.
Third, I'd list what's left Reverb/EvilBay.
On the other hand...
Normally, I would say "no" to a giant package deal. However, if you live in an area where there aren't a ton of drummers, I'd possibly consider it. You have a lot of cost tied up in these drums in addition to potential costs to ship each kit out individually in addition to fees for selling on ebay or Reverb. The amount of time it would take to pack up 30-something kits sounds like a nightmare in my book. I'd develop a dollar in your mind as to what you would like and see what they can do. If your number and their number are too far apart, then consider selling locally. I'd probably limit it to selling 5-10 at a time.
This may be just me, but I'd be willing to take a significant loss just to get them out of the way. Not a loss on the level of "stupid," but if I could get it done in one swoop and the numbers feel good, then I would do it (you can always say "no" to the offer). You wouldn't have to worry about taking lots of pictures, editing those pictures, writing detailed descriptions, listing them, answering emails, finding shipping boxes, running to the USPS, buying insurance, calculating shipping costs, and dealing with potential damages. In my life right now, I simply do not have the time; however, if you do and you enjoy the process of doing all of these things, then by all means, do what you like! To me, I'd rather lose about 20%-30% on each kit to NOT have to do this, but like I said, I don't enjoy the process of selling. Ultimately, it's up to you what you want to do. You have a higher likelihood of making more selling online; however, is it worth your time and energy? I think only YOU can answer this.
3) I'm thinking I would probably enjoy the few high end kits more, because it's less to think about and keep track of, and I know in my heart that they are very high end kits that I got to pick out myself. Plus I could display them all, set up, in one room in my house (no way I can do that now!) and save money by getting rid of the storage unit. Do you agree?
Yes. I agree 100%. While there are some special cases out there, I would never want any sort of long-term rental storage fee to store crap I never even see.
4) Do you think I would notice the difference between my mid-level kits I am used to, and a high end kit? Build quality, sound, ease of tuning etc?
If you care comparing a Japanese stencil kit to something like a American-made Gretsch, Ludwig, etc., then yes. You should notice a significant difference. Granted, old 3-ply kits with re-rings are fantastic; however, those old Japanese stencil kits may look cool, but many of them sound horrid to my ears.
Best of luck with all of this!