Not really. After all, the game supports loading in 8 characters at once. It's not that difficult to load up, say, the first 3 characters for each side, then when one is eliminated, free up the memory and load in the next in the queue in the background. That way, outside immediate SDs, you'll always have the next character ready to display.well here is another thing... if it's all in one battle, that means every character has to be loaded in and ready to come out to fight when it's their turn.
can you imagine attempting that with 50 characters?
3 to 5 seems fine, and those are the number of stocks i typically see used, anyway.
How do you think PM does All-Star VS. with 4 players?