They will just add more sever load space if they need to. The server makes as many instances as needed so there will never be a time when there's no room for more characters because a new empty instance will just get created for them to get out into and empty instances eventually vanish, freeing up server load.

I remember back in the day when SL didn't exist, PL showed a count of how many people were loged on, then it got silently taken out. Also I heard the game launched with separate servers but then they changed it do everybody was on one bug server with instances.

There's enough room for everybody.

About the parallel universe campaign idea, meh, doubt they'd do it but it's interesting. SL is still young.