@evan TBH I think the upper bound for a Mastodon server should not be "how many people can the server handle" but "how many people can the admins and mods handle". And if that's only 1000, 100, or 5, that's fine.
I've seen a lot of servers with growing pains, and it's not a technical issue, it's social—taking on users en masse without the resources to vet, moderate, and support them.