They have done this in Neocron. Once in about 20 min, this message would speak \"Attention citizens, highly dangerous criminals have been sighted inside the inner city limits\" it was really cool.
As for lag, it would be unberable. I lag like a poo when i play a 12 player WC3 map with other comps, i can bearly move my mouse, maybe i should get more ram, but that is not the point. The point is, those with low end systems would be left helpless due to the inability to move, or defend from the oncoming attacks.
P.S. i have made a post about this sometime back, referign to Leniage, and the Dark/Death knights attacking a noob knights town. But there were only 4-5 of them at any one time.