The console as it stands right now, does not have the hardware to support it. It would either need more RAM, or to have 8GB of dedicated VRAM added.
Since the hardware is not likely to change in the near future, it is reliant entirely on optimization. TFP had to do a LOT of optimization and force lock down some settings in order to get what you currently have functional on your hardware.
Something else to note, is that you aren't hosting a server. You are just sharing your local world. It may seem like semantics, but it is a pretty big difference.
Hopefully in the near future you will be able to rent a PC-hosted dedicated server for up to 8 players that the console will be able to connect to. That is hopefully coming with v2.0, but it isn't set in stone. It's been hopefully coming for a year already, and the holdup is Sony and Microsoft approval.
Barring that, I would think that in a couple of years it might be possible that there is enough optimization in the client, and increased efficiency in the game engine that it will be possible for the consoles to have larger maps, and higher player counts. I would not hold my breath though.
This game is a very hardware-intensive title, and the consoles are very limited on the hardware that is available for the client to use.
