I visited Reykjavik last winter and was astonished at the number of tourists visiting in mid-January. I had wrongly assumed it would be a down-time because of poor weather and short days. Nope, tour agencies just cut prices enough to entice people to travel "off-season".
We had a long weekend, so stuck to the main tourist sites within a few hours of the city. They were all crowded with buses and vans full of tourists.
Not only were the crowds themselves an eyesore, a huge number of the tourists were poorly behaved. Not just inconsiderate in the face of large crowds, but actively damaging to the area. Littering, hopping "do not cross" safety lines, wandering too close to the water's edge (Iceland has rough seas and it's easy to get swept into the ocean).
I don't know if there's an easy answer. All the tourists do bring money. But, I did get the impression that Iceland was being ruined.
I also recently returned from a trip to Peru, where we hiked part of the Inca Trail and visited Machu Picchu. While the crowds were large, I was pleased to learn Peru has limited visitors both to the ruins and the trail to try and ensure both are maintained for generations to come. The Inca Trail limit used to be 2000 people/day and is now 500 (that includes guides and support staff, so ~200 tourists).