My Dad was James - we all loved him dearly. My sister and I have four sons between us and all have James as their middle name, and our two grandsons also have that middle name. It has become a nice tradition !
That sounds really lovely - but even there, I can see potential issues for strife in the future, if it's kept up. Your sister and you had just one Dad, so no issue; but your grandsons have two Grandads each - and then their sons will have four Great-Grandads each.
How do you decide which one becomes the 'donor' and which ones not? What if you end up with four strands of the family who all have their own very long-standing traditions that all boys (or girls) have a certain middle name?
Absolutely not criticising you at all, but I can see that it can all become a bit of a minefield!
Also, I often think, when somebody names their child after a recently-deceased grandparent, to honour them: they will have another grandparent of the same sex, who happens to still be alive now but who will, in all probability, also become that loved, deceased GP for most of their lives - but they missed out on their name being memorialised just by virtue of having lived possibly a few years longer!
I also see how it can backfire to use a deceased loved one's name in tribute - some will find it a very special, touching honour; but there's always the possibility that, with little baby Sarah now here, living, active and a daily presence in everybody's lives, the name becomes fully associated with her, and then Grandma Sarah, whose life was precious but has since come to a close, has lost her distinct marker within the collective family memory.
The one I really don't get (not as popular now as it once was), is giving a son the exact same first name as his dad's first name (it was never as common for mums and daughters). Two people living in the same house - and even then still very much linked - for a large part of their lives with the exact same name just seems kind of pointless; just seems like a deliberate act to sow confusion, have to keep clarifying/giving context and getting each other's post!
At least, now that everybody has their own mobiles, you don't have somebody answering a single family phone that's tied to the wall and saying, several times a day, "Which Alan? Sorry, the surname doesn't help, as they're both Alan Smith. How old is the Alan you're wanting? Just roughly?! How do you know him?!" Straightforward when one Alan was 28 and the other just a baby, but once Alan Jr was a teenager....!