This is a game created for the PS3 that allows 256 player online matches at one time in which you join a team of 128 players and can squad up with a group of 8 players to limit having to talk to 127 of your teamates. The game shows no lag because of the way they are making the game run. Each player is being connected through a server in their geographical location which then connects them to the other servers around the world instead of being connected straight to the other players in the game. This allows no lag to take place. So... i dont know how different 300,000 people would be compared to 256 people but if this is a true story then i think Microsoft has the ability to pull it off.
now a days we can do pretty much anything its just if they do it right, if they dont take their time and think it threw it will be laggy as $#!T, and we wont have any fun. but if they do it like you said it would be pretty sweet having that many people, but think how easy it would be for other people to steal your kills