The lower molar concentration could lead to reduction in dye regeneration and triiodide reduction reactions. However, further increase in iodide concentration could be redundant for charge recombination between oxidized dye sensitizer and electron in the conduction band of TiO2.
You can find lots of excellent related information in detail at:
2. Influence of Iodide Concentration on the Efficiency and Stability of Dye-Sensitized Solar Cell Containing Non-Volatile Electrolyte, Michael Gratzel and his co-workers. ChemPhysChem 2009, 10, 1834 – 1838, DOI: 10.1002/cphc.200900199
I think Milad has give a good answer. You need just enough to get adequate hole transfer to the dye. Any more is redundant. Too much and it might start precipitating out and damage the cell.