Scaling issues with Nagios as CaSC
Personally I don't think using CasC itself will have any negative scalability impact.

Fundamentally CasC means the actual config files are not hand-maintaned, instead they're auto-generated following version-controlled rules - which can be a lot more reliable.

But once the config files are generated - the service using them functions just as it dit with manually-crafted config files.

If anything - using CasC should make such large nagios system more reliable - if done correctly CasC should reduce/eliminate the risk of human error in modifying the config files.