Someone buying a turbo engine for a racing engine should get the biggest turbo that can be spooled or that rules permit. If it's a street vehicle, it's better if the turbo engine is a little on the small side for drivability.
The stock turbochargers that come on most engines can get up to 500 horsepower without having to buy a custom unit, and for many people, that's enough. However, people who tow or want up to 800 horsepower need a custom turbo. If the engine spews out a lot of black smoke, a classic sign of overfueling, adding a custom turbocharger lowers the temperature of exhaust gas while adding horsepower and reducing the risk of failure, even at higher boost pressures.
The dimensions of the turbocharger are important too. Most stock units have turbine wheels with large diameters and smaller inducers on the compressor side, with large exhaust housings. The housing size determines the speed with which the turbocharger spools up, but if the housing is too small, high drive pressures can result, causing stress on the turbocharger, engine and exhaust hardware. Finally, the design of the engine is important. A turbocharger that doesn't spool until 2,200 revolutions per minute with an engine that makes power at 2,800 revolutions per minute can result in trouble due to the small powerband. However, the engine number is altered to 4,500 revolutions per minute, then that spooling range is fine.