Yes, the community is working hard to make k8s scale to 1000s of machines and beyond. There is a great blog post about the engineering effort from the various communities (k8s, etcd) to make this happen: http://blog.kubernetes.io/2015/09/kubernetes-performance-mea...
In fact someone recently made a video showing a 1000 machine cluster; let me find that.
UPDATE: here is the video https://www.youtube.com/watch?v=sgWv9sVTIYQ