Select2 limit number of tags

Sure, with maximumSelectionLength like so:

$("#tags").select2({
    maximumSelectionLength: 3
});

Maximum Selection Length

Select2 allows the developer to limit the number of items that can be
selected in a multi-select control.

http://ivaynberg.github.io/select2/

It has no native callback, but you can pass a function to formatSelectionTooBig like this:

$(function () {
    $("#tags").select2({
        maximumSelectionLength: 3,
        formatSelectionTooBig: function (limit) {

            // Callback

            return 'Too many selected items';
        }
    });
});

http://jsfiddle.net/U98V7/

Or you could extend formatSelectionTooBig like this:

$(function () {
    $.extend($.fn.select2.defaults, {
        formatSelectionTooBig: function (limit) {

            // Callback

            return 'Too many selected items';
        }
    });

    $("#tags").select2({
        maximumSelectionLength: 3
    });
});

Edit

Replaced maximumSelectionSize with the updated maximumSelectionLength. Thanks @DrewKennedy!