Yes, a client is aware of the data of only the clients that are in his scene. Sure MMO's would have problems if players made a gathering on a small spot, like listening to a concert, but there you would rather be limited by clients bandwidth, which is on average 250kB/s, that can esily be not enough for data of 1000 commrads per 30ms.
Third: If you have thousands of users, the model of "forwarding all data from other clients to each client" breaks down. You end up with an n-squared data problem that simply doesn't work.
You're probably not considering overheads (which would be far greater than the actual packet data) if you think 1000 peers is doable at 30 fps on a broadband connection.