I just recently learned of one site that has over 16,000 profiles. The only concern with Active Profile when you reach this size is that it stores images in the database. Not a big problem as long as you have the resources. We will be changing this very shortly so that you can choose to store in the database or filesystem.
I don't see any reason why you want to split the project among two installations.
Can we just keep buying more database space as needed and not worry about it?
Yes.
Your biggest concern should be hardware and number of concurrent users. You are going to have problems on any DNN site in most shared hosting scenarios when you have over 100 concurrent authenticated users.
Let me know if you have more specifics and I'll be glad to give you more details.
Thanks,
Will