The two primary forces I see stopping epic boxing are cash and bandwidth. You build solid enough PC's and you can quite realistically run an absurd number of clients per machine. Step that out by duplicating machine setups and the next roadblock you run into is blizzards server capacity.

125 toons in a single area the game deals with constantly, generally not in combat though, or all moving at once. As the event BigRedKitty hosted showed, things were pretty stable until people started moving. Granted, that was in the hundreds and at least above 300 players all in mulgore.