I have a feeling I'd get super specific about what I'd want to put on there (i.e. the best of the best of the best) and end up forgetting about 3/4s of every artist's music. I'd rather improvise my playlists and throw a few albums together on shuffle than digging through my library trying to make the perfect mix. Maybe I'm just lazy
The way I do it is like this.
For a given type of music, I have a huge playlist of the best handful of songs on each album. Could be just one or two songs, could potentially be an entire album (rare). From there, I'll periodically make a more selective list of perhaps the best song for each performer or the one that best fits the present mood. So I'll have two lists, one that has it all, one that has the best. If I'm in the mood for the best, it's there. If I want the fuller experience, it's also there. I sometimes make intermediate lists, too, so I might include 2 or 3 for a given performer so it meets in the middle.
I have playlists for everything. 80s music. 90s music. Wayback Wednesday (redundant with 80/90s). Throwback Thursday (redundant with 80/90s, but not with Wayback Wednesday). "Electronica" (Full, Middle, Short, and even a subset for more downtempo). Jazz. Vocal Jazz. Rock. Even gaming. I'll put together playlists of favorite songs of given artists, so if they stretch for 3 or 4 or more albums, I'll have my own selection of greatest hits on standby. I have a playlist called "That's Un-American

" that simply has a collection of foreign-language tracks. I'll use on-the-go to mix various playlists together on the fly at work so if I want 80s pop to interlope with classic Sinatra, I can do that, too.