In terms of limiting battle sizes, is the main argument one purely of FPS / performance?
I've never liked the fact that two massive fleets can fly into each other, yet maybe half the ships actually go into battle while the other half waits patiently.
On modern day rigs, I assume it's been tested to throw every ship in a max capacity fleet into battle?
I assume it kills the game or is unplayable? Otherwise why not, I'd prefer to just simplify the whole thing and have two fleets battle it out, as they would in reality.
Expanding on jackundor's point-
At higher sizes, battles become boring slogs of capitals & cruisers bashing their heads against eachother, waiting to see which side runs out of ships first (and it often leads to the congaline behaviour that's been brought up in this thread (I think it has at least)).
It also all but removes frigates & destroyers from the game (lategame especially), 99% of the time they simply don't have the stats to poke their heads out into a nigh-unflankable wall of guns, let alone do any damage to it.
This isn't even touching on the fact that the AI's been tuned around the 3-400 limit, so it gets
really wonky when you're bringing 2-3x the amount of ships into a battle, I've seen some full-on traffic jams develop as the AI moved to capture points.