There are definitely limits to the engine, considering entities:
HL engine limits for ALL entitys: 2048
HL in-game temporary entity engine limit (part of the 2048?). Used for breakables, sparks, gibs, ect.: 500
data memory limit for entitys: 0.5M
MAX_MAP_ENTITIES Compiling tools limit for ALL editor placed entitys in a level, incuding brush, models, sprites & point entitys like lights (mod limits may vary a bit lower): 2048MAX_ENGINE_ENTITIES (light, light_spot and light_environment entities that have either a targetname or a style attached to them (ie. all switchable lighting in the map).: 1024
compiling tools sub-limit of brush based entitys (part of the 2048): 400
possible model & sprite entitys sub-limit (part of the 2048?): 400
specialty entity limits: various
From
http://www.slackiller.com/tommy14/errors.htm