No, not at all. 250 is just the limit on the Pro Team plan. If you need more than that, then you may need to look at an Enterprise plan.
Absolutely. I can’t find the reference right now, but I’m aware of one app that was comfortably supporting in excess of 300k users.
I guess it’s low because Private Users is considered a valuable feature. So if you want more private users, you just have to pay for them.