Can they or can't they handle it?
On the server side I believe modern rented out systems can be quickly scaled up if necessary, and twice the size probably doesn't cost twice as much either. As for the concentration of avatars in one place, I believe quite a lot of anti-lag measures have been taken already. I guess creating copy locations might also work for non-pvp areas, or even with them (a question of shards).
For me a bigger question comes with economy scaling and loots. I've already moaned quite a bit that some pps can't even handle more than one (1) player on a mob set without the wave loot being grabbed within minutes. Even just one player can take some regular wave loots within just a few mobs, it's crazy! That's nowhere near a technical server limit; it's completely screwed wave balancing! In the past I've likened it to a coffee shop with only enough capacity to make one cup of coffee every 20 mins or whatever...
That also should not really be a problem, though, if MA properly adjust things for a playerbase twice as large, 5 times, 10 times, etc., although the long-term progression may be affected, I accept that. It is harder for MA to deal with playerbase fluctuations at a scale of many thousands, but at least the game would be busy and we could probably see the flow a lot better!!!