Firstly - both of the previous answerers are incorrect about adding 'an'. There is nothing wrong with the sentence as it is. I cannot see any single word in there that is redundant. If you removed the 'with' you would have to put something else in to replace it, or rearrange it as Jmat suggested.

What you said is perfectly fine (with Tane's correction). You could shorten it like this: "As with anything excessive,..." And even further: "Like anything excessive,..."

Actually the sentence isn't redundant at all you just missed the article "an". Sometimes the smallest words can be the toughest. haha "As with anything carried to excess, daydreaming can be harmful." ---> "As with anything carried to *an excess, daydreaming can be harmful". Your original sentence is easy to understand, but the second one is more correct. Nice job^^