Deployed pod using replication controller with replicas set to 3. Cluster has 5 nodes. Created a service (type nodeport) for the pod. Now kube-proxy adds entry about the service into ip-tables of all 5 nodes. Would it not be a overhead if there are 50 nodes in the cluster?
This is not an overhead. Every node needs to be able to communicate with services even if it does not host the pods of that service (ie. it may have pods that connect to that service).
That said, in some very large clusters it was reported that performance of iptables updates might be poor (mind that this is for a very, very big scale). If that is the case, you might prefer to look into solutions like Linkerd (https://linkerd.io/) or Istio (https://istio.io/)