Yes, it will crush a core.
It actually is a concern as DF in game (dwarf mode anyway) does a huge amount of pathfinding for the little buggers and other creatures. Not to mention item tracking and other bits.
This means that once your fortress gets somewhere around 200 dwarfs you start getting into FPS death because it doesn't scale. So it actually as is a problem, and development of the game is going against the grain of modern computing.
I'm not downing on it at all, DF is Tarns forever project, and a damn good one. He, by design, doesn't owe anyone anything. But the reality of it is that it only gets less and less playable over time and will not be able to reach the mass civilization simulation that many of its players want as more features are added and core speeds remain relatively unchanged.