This blows my mind. I've been thinking about writing a small multiplayer game for a few weeks. And today I was actually doing back of the napkin calculations. The thing that quickly became clear is bandwidth is O(n^2) where n is the number of players in the same location, since you have to share the location and velocity of each player with each other player.
Here's an example of a calculation I was using. It's the monthly bandwidth in TB of having a certain amount of players in a shared space (3000 in this case), assuming that the location/orientation/velocity of each player's ship is contained in a measly 48 bytes and you attempt 30fps.
(48 * 30 * 3000 * 3000 * 3600 * 24 * 30) / 1e12 = 33592 TB = 33 PB
THIRTY THREE PETA BYTES to simulate a single battle for a month.
I'm looking around at various VPS providers and the bandwidth they offer. Using the naive calculation above and the cheapest Linode offering and it'd take $3 million/month to support a single one of these ongoing battles.
Now, I'm sure the numbers above aren't used in reality. Obviously, you can reduce the updates per second... but not by much. You can't shave much off how much you send. It at least gives you a sense of the orders of magnitude required to support such a thing. Even contemplating supporting 100-1000 people at once is looking very difficult for me to pull off.