My mum kept a few of our baby clothes, but only the very special or handmade things (dresses she smocked for us, sweaters and hats knitted by our great-grandma, a few nice pieces she bought in France). Everything else was gradually given away over the years, either to the church or to other mums.
I think she had the idea that our kids could wear the things she did keep, which is nice, but not very practical! I'm sure that by the time I have kids (if I do), I'll want to get/make them things myself and have new memories, not force my old clothes and memories on them.
I remember getting awesome hand-me-downs from friends of my parents when I was little. One girl, who babysat for us, gave me some old blazers with which to play "office". Turns out they were actually very well-made wool riding jackets- which came in very handy years later when I started riding!