Actually your example is not that oversubscribed. I've seen a couple of big production webservers which are running a threadpool of 1000 threads on < 100 cores.

Actually your example is not that oversubscribed. I've seen a couple of big production webservers which are running a threadpool of 1000 threads on < 100 cores. And they perform by far not as bad as all the new hype around async IO tells us. One key here is however that those threads typically all run very independent workloads. If there would be a massive amount of synchronization between those threads or lots of context-switching due to message passing between them it would likely be worse.