The phase diagram of soft spheres with size dispersion is studied by means of an optimized Monte Carlo algorithm which allows us to equilibrate below the kinetic glass transition for all size distributions. The system ubiquitously undergoes a first-order freezing transition. While for a small size dispersion the frozen phase has a crystalline structure, large density inhomogeneities appear in the highly disperse systems. Studying the interplay between the equilibrium phase diagram and the kinetic glass transition, we argue that the experimentally found terminal polydispersity of colloids is a purely kinetic phenomenon.