Our CPU usage was at 70 most of the day (for anyone other than Danny, the usual usage is one!)
That does hurt servers, but it's the physical "in and out" of traffic going through the various switches and drive controllers on the machine. You could have masses of RAM, and 8 CPU's, but if your drives are slow, or they're not linked optimally, then the server will crash
I've found having the database on one hard drive and the files on another works well, but again, if these drives aren't linked effectively then it all comes crumbling down
a site like the OS should be able to cope with huge numbers though, we've upgraded our system to be able to cope with up to 10,000 concurrent users (although that needed downtime, so we avoided it until about 4am I think) and the costs wouldn't be prohibitive to a multi-million pound, multi-national business