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Encumbrance in video games can be quite annoying, and as such, game designers are often tasked with solving this perceived problem. Now, if you'd like to know how exactly some of them go about it, you should check out this Gamasutra article featuring a few quotes from the one and only Tim Cain among other people.
Here’s a quick excerpt:
As a result of this, in many of the meetings Cain has been a part of, the idea of removing encumbrance entirely has come up, to satisfy those who have a dislike for the mechanic. But he’s always quick to point out that while this may seem like a promising solution at first, it can create other production issues elsewhere. For instance, it can put a lot more pressure on your UI team, as there are then a lot more items that need to be displayed at once.
“You end up with enormous inventory sizes and there’s the issue of well, how do you manage that?” says Cain. “And there’s different ways. You can say ‘Well, we’ll limit how much they can pick up,’ but you’ve now done encumbrance. You’ve just given it a hard limit. Or you can say, ‘We’ll break things down into categories or we’ll let things stack,’ but then you’ve just introduced all these extra issues of now you have pages of inventory or categories, or stacks of items. How do I sell part of a stack or how do I use part of a stack? What if two items are almost identical, but not quite?
“No matter what you decide to do…you’ve made a decision and created…issues that you have to resolve later. So games that say they don’t have encumbrance, the first thing I say is, ‘What did you do with your inventory? How did you fix that?’”