There is no maximum number of notes in a vault. Yes, of course there is performance impact the more notes you add (doh!), but is not that simple. Obsidian does many things (the graph, the linked mentions, the unlinked mentions, etc) and not everything is impacted the same way and not everything depends only the number of notes, interconnections matters, and the attachments too. Some functions suffer more than others.
When you say other software can handle more notes, that is possible. But what features do these software exactly offer?
There is definitely (and always) room for improvement. However, to be clear many things are already “cached” (organized in databases). Adding a full text search engine, which I am sure will happen at some point in the future, will speed up search but have no effect on improving the graph processing on 1M notes. And it’s not a free lunch either, the indexer will have to run constantly in the background (Some people don’t like seeing an app using 5% cpu at “idle”).
My personal opinion from observing the community discussion is that the vast majority of our user are fine with the current level of performance and demand other things (better mobile, a wyswyg editor, sync sharing, etc). Those things will be addressed first.