In discussing the question of how many words does someone know or need to know I think we need to begin at the beginning and ask owurselves if we know "know"?
What does "know" mean? I read your Email messages that you send to me and other teachers. Do I know you? Do I know the Frenchman who asked me to write some copy for his industrial cosmetics supply business in China? Do I know my Chinese friend I met six years ago? Do I know my wife? In other words, if I asked you, "How many people do you know?" Would you be able to reply with a figure of some degree of precision?
How do we know words? By being familiar with their dictionary definition? By being able to recognize them in a text or conversation? (Passive) By being able to use them in writing or speaking? (Active)
Do we really "know" words or are we mostly "getting to know" words and our knowledge of words is constantly developing or deteriorating depending on the amount of use and the variety of use.
Krashen's idea of getting to know words would be through a tremendous amount of input. This way the most frequently used words do not have to be taught from an artificially developed list as the student will be exposed to them in a natural way through all of the reading the student does. The student would see the words in their natural environment.
Some of my upper-intermediate students still call females "he" and males "she" from time to time. How well do they know these pronouns? They know the rule 100% but they still make systematic mistakes in usage. Do they know these words 70%?
In any given sentence how well does an intermediate level student know each individual word? If we say,
The tractor-trailer overturned on the highway.
How well would our student know those words? I’m just guessing but maybe,
The(80%) tractor-trailer(30%) overturned(60%) on(90%) the(80%) highway(90%).
Students make a lot of errors with "the". Now, "tractor-trailer" may be very unfamiliar to those who don't know American English but the student may be able to guess something from the word and understand its' a vehicle, prepositions are always a problem for students, "highway" may be somewhat familiar. Which of those words would we say the student actually "knew"?