The bottleneck isn't the server hardware - it's the same hardware that handled 900 people just fine, save a few HDD replacements and RAM upgrades every now and then.
The code, however, has changed considerably over time, and sometimes things break somewhere down the line; in the last few months we haven't had enough people to cause these sorts of bottlenecks to propagate all the way to lag. Rest assured since we probably want a good Steam launch as much (or more) than you do, things will be fixed and lag will be reduced.