I have often pondered the question around the limits, but thanks to this discussion you guys have had, it has given me a much better appreciation for the incredible work the Schine guys are doing.
From what I understand after reading rasinbats idea, it's very similar to how we use the game.
The entities we create have a core that we name (our own master ID for our own collection of entities), whether it be a ship, station and the asteroids have one too. Then there are all the different configurations/orientations of blocks that make up that entity, which would be akin to associated block_IDs, like placing a decorative computer block and calling it the Spa pool computer (BlockID_SpaPoolComputer).
I think the idea would work, but the computer processing resources required would ramp up considerably when you want to build, check, change, destroy and compensate for interaction with other entities let alone the universe or local sector.