@Jace: I'll try and explain a bit because of how EVE mechanics work many people don't understand. First of all this is more individual players than are typically online in an entire MMO cluster/server, all gathered into one grid of one system, essentially in the same place. EVE uses dynamic Time Dilatation (TiDi) to slow down incoming server calls dramatically under high load for the affected and surrounding systems. At maximum it slows time by 90%, allowing the server to handle 1/10th of the normally necessary load. This has allowed the server to even stay up during this size of engagement, however their server architecture comes into play because this fight was extremely organic.
Eve uses lots of machines to run the individual systems and clusters of systems of EVE. The universe is basically 3 concentric rings, with the center being "High Sec" and more densely populated, the outer ring being player controlled "null sec/0.0" with still a good number of players, and the center ring being the forgotten bastard child known as Low Sec. So few people live and use lowsec systems, it needs comparatively little server resources to run, because nothing ever really happens there on this scale. A typical engagement approaching this size happens in Null Sec, usually during a sovereignty battle and relatively easily predictable. This allows CCP time to transfer more server resources to the affected node in advance and allow decently smooth gameplay even under maximum TiDi.
This fight was different, it grew organically throughout the fight, started in lowsec and didn't have reinforced machines to help out, causing lots of lag. Essentially someone laid a trap, waiting for CFC to drop in Caps or Supercaps to take out a moon mining pos. From reports CFC accidentally jumped in a lone titan (Relatively common mistake of hitting jump instead of bridge in an interface), and PL committed their supers to the field to take it out. The rest is an organic escalation of a supercap fight which eventually obviously lead to some laggy situations. It's unfortunate, but from the stream it looked at least marginally playable still, which is a feat from an organic fight with this many players all in one battle.
I've played EvE before, a great deal actually. My problem, because it seems I need further clarity, is that this game has been around forever and they still can't figure out a way to reliably create large scale battles. It's like an Alpha test for BF1942 mods that tried to do 128 players back in the day. It's a cute number and it makes for cute screens but ultimately none of that matters because it breaks.
I wouldn't say it broke exactly. It was really slow but the battle still took place and all those super capital ships were legitimately killed. Even if it was time dilated like crazy.