Edward Harrison describes some of the issues you run into when working on a SQL Server instance with thousands of databases:
One of the headaches we frequently have to deal with is the excessive amount of time it takes for SQL Servers with the discussed design to go through any planned patches. We have seen this while carrying out some planned maintenance for one of our customers and the work simply comprised failing over a SQL Server instance, from the active node, over onto the passive node so that the former active node could be patched. The passive node had had its SQL Server patched earlier in the day while the active node was still on the older patch level.
This SQL Server had 10,000 databases and all that we needed to do was to simply click the buttons to failover the SQL Server and then wait for it come online on the other node. In the end, this failover took nearly four hours to complete because upgrade scripts had to be applied to each of the 10,000 databases.
Even a couple thousand databases on an instance can slow things down considerably. Consider an operation which takes 10 milliseconds like laying out a database in the object explorer in SSMS. With 10K databases, that 10ms activity (note that I’m making up the number) would take 100 seconds. And these are often blocking tasks, meaning you’re sitting there spinning your wheels for 100 seconds before you can do the thing you wanted to do. The pain is real. And for server activities, most administrative functions (backups, CHECKDB, index rebuilding, etc.) is done one at a time, meaning you have a lot of time spent on this stuff.