Yes, it will restrict your repertoire. I have a 61 key synth, and there are occasions when I have to adapt a piece 'to fit'. Not very many songs, mind. It doesn't make me regret buying it 20 years ago.
There is a dedicated transpose key that I can configure tofrom -24 to +24, so the theoretical range is greater than 88 keys, however, despite it being very easy to use, it can still be impossible/impractical to execute whilst playing (you also have to shift your hands pretty quickly tooto compensate for the left or right hand that didn't need to transpose). I only usually transpose keys between songs.
You can get an 88 key midi controller very reasonably: http://www.amazon.co.uk/M-Audio-9900-40832-00-Keystation-88es/dp/B0006676A0/ref=sr_1_3/280-5526809-4799532?s=musical-instruments&ie=UTF8&qid=1400103634&sr=1-3&keywords=88+key+keyboard+weighted
So you can enjoy the best of both worlds, space and pocket permitting. Since the 61-key market does have some fine workhorses. Many 88-key models are also available as 61-key models and can be half the price. So you can save some money if you already own an 88-key controller, and a compatible cable, of course.