Cinth has managed some pretty crazy massive battles lately with his "I'm just trolling the AI" chokepoints, but that's with turning everything off that can be turned off, and I think it still slows down a lot for him.
Partly it has to do with the Unity engine's limits on how much managed heap memory we can allocate, so you wind up with a lot of time spent in garbage collection, etc.
Partly it's just that thousands of ships vs thousands of ships means many millions of computations to get even halfway efficient target lists, etc.