Is more than 32 players possible ?
anything is possible.
do we have a working means? NO
will anyone do this? NO (unless you have a lot of money and want to hire a experienced crew)
it's to much work, rewriting the engine, everything from scratch, even the plugins, all of them would have to be rewritten, plus it would be illegal, without valve written consent.
you are not the first to think this, not even close, this idea has been around for over 10 years and never seen anything done, i have seen big topic about this a while ago, and didn't work out!