No way do we reuse towels.
I am with the OP that I do not want something that touched certain (albeit clean) areas then touching my face. It takes about 10 minutes total to wash, dry, and fold a load of towels. No need to be stingy on towels except for the environmental factor..for that I do feel bad, but not bad enough to start reusing towels!
BTW, there are 5 of us, 3 girls, 2 boys. All the girls have long hair (mid back!) I would get annoyed by some of the stories where girls use two towels, one for body, one for hair. That isn't necessary for us..our towels are plusher so they can absorb that water no problem!
I take it so far I don't even reuse washcloths. I make up for it by not buying paper towels, but I use kitchen rags like paper towels- use it for a few minutes and then toss it in the laundry so mildew/mold/bacteria can't grow. I go through probably 15 washcloths a day. I figure for as much as I am cleaning, doing an extra load of laundry/towels a day is still better than going through a roll of paper towels a day and helping to kill a tree. I do FULL loads of laundry, not half loads like some people- <cough> MIL- so I think that helps.