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That's alot of sites. The thing with having that many sites on one service is that alot of them may not be active so the server can handle it, but it only takes 1 or 2 of them to become active and then it is likely to affect the others.
Also, out of all them sites, I would think that there is some that has 1 or 2 badly written scripts that will use more CPU than needed plus bad database optimization meaning their queries taking longer than needed as they are doing more work.
Although saying that I think most shared hosting servers have software in place so that it can keep track on the sites that may suddenly use alot of CPU and then suspend that site or do something so that it doesn't cause the server to crash or the other sites to slow down to badly.
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