I have 2 autoblogs right now that currently cannot break 1000 pages indexed in Google. They go up, get to about 800 pages indexed, then drop down to 300 and the cycle repeats. Should I be worry about this? Does having lots of pages indexed provide benefits?

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site:craigslist.com = 287

That includes all subdomains. I'm pretty sure Google has more than 287 pages cached of CL.

I'm not sure when this changed... but it did a few years ago. I used to have one site with over 500,000 pages indexed. Now it shows around 12k.

For some reason, I still look at these too.

Google shows site:eBay.com 135,000,000

I personally think it matters.

I built a site back in May. Google just fell in love with it and over the next 5 months it gradually grew to over 100k pages indexed. In addition it indexed over 15k images as well. Each time I would check site:mysite it would increase and so would my traffic. Then for some reason google decided it didn't love my site anymore and slowly started deindexing the pages. It is now down to under 20k and about 7k images indexed and traffic has dropped by about 50-60%.

Is this a direct correlation? I personally don't see any other reason since 99% of my traffic is from google natural search.