This is kind of unavoidable, but you do have 32 bits to play with. Windows did it slightly better with the SID: https://learn.microsoft.com/en-us/windows-server/identity/ad...
> which makes it very difficult to contain users to things they should control
It's not the file system that's the problem here, it's that "everything is a file" is not true for a whole bunch of important stuff that you might want to apply access control to on a UNIX system. Such as the right to initiate TCP connections. This sort of thing is why containers are so popular.
NIS and LDAP do let you have a large number of users. Heck, we managed a few thousand users in /etc/password back when I was running https://www.srcf.net/ .. in 2000.