I'd say this argument is mostly dead, and in Kronos' defense, he has said this is just an idea to entertain. I do have to agree with the general consensus that the main thing stopping this is computer hardware (and not being 64-bit compatible, grr). Just for the heck of it, I went into the custom map in Diplomacy with all my mods turned off and tried to see if I could create a 100 star map. I got tired of clicking when the number of planets in the map reached 1000 though, at 6 planets a star, that's 166 stars, roughly. I clicked preview and after a minute or two of loading, it started up. I am unaware of any cap on the size of maps placed in the software itself. You can go click to add new stars a billion times if you want a real galaxy, but if your computer cannot compute such a vast amount of information (with the 32-bit OS limitations) then what's the point? Many people are begging for 64-bit support for this very reason, large maps with lots of players, and being able to use all of the super duper hardware they have accumulated and scraped together.
On another note, I am just curious as to why having 500 planets across a dozen stars is not enough? (if it is, ignore me, haha, but...) Realistically, we don't know of any planets that could support life out there in space, not to my knowledge anyway. I won't say we can't eventually find some, I personally doubt this, but I'm open to the possibility given sufficient proof. But, obviously this is not a game totally based on reality, for good reason, would not be as much fun! But, my point is, who is not to say that "small" maps are actually small (and I do not consider 500 planets small, being a Civil Engineer with a solid concept of mass, that is a LOT).
Another note, you would need to drastically increase the limits set for fleet size for maps of significant size. Frankly, I'd rather see bigger fleets than bigger galaxies. But with the game mechanics as they are this would be hard to balance I think? What I have in mind is, rather than have a "fleet upkeep" percentage at each fleet level, each ship itself has a flat upkeep cost that increases with your technology level (i.e. better lasers are more expensive to both build and maintain). It would be a realistic upkeep system that could be used to run a persistent universe, but I think that is beyond the scope of this game. Sins seems rather pointedly aimed at these "small" to fairly large scale battles with a very streamlined system. I've never played it, or really looked into it much, actually... but GalCiv, another game by Stardock, may have more of this "conquer the galaxy" idea you are pursuing.
That is my opinion though, I have a hard enough time on small maps and I have a really cruddy computer. I can see how others might enjoy games that take so long they may as well be in a persistent universe. But I think this is a case where idealism and practicality collide. You COULD have a million stars with hundreds of planets on each and run this on a computer the size of a small car. But would that even be fun? Honestly? (you can say yes, I just can't imagine enjoying it myself... then again, I tried EVE for a day and could not get even slightly interested) I mean, this is coming from the guy who posted here about massive graphics upgrades. I mean, ideally, if I could zoom in and see people walking around inside my ships, I'd probably explode with joy. But even more "basic" upgrades are too much for most systems to handle and thus, the developers who have to keep the wider audience in mind have to limit what they can put into the game.
Oh my goodness I just wrote a book! To think, was just going to post a sentence or two...