Populating a town with massive generations has a risk.
Since story progression spends a bit of time figuring out what inactive sims are doing, your computer can only handle so many sims in the town at once. After that threshold has been reached, story progression will "cull the herd." This is done by moving sims out of the town, and forcing sims to die in tragic accidents. Good Guy is correct in his statement that relatives of the active family will not be story progressions first choice to move out, but relatives of the family are fair game for accidental deaths.
The risks are mostly theoretical, and some are just how it's perceived. As townies leave, you lose potential future spouses, and as sims become "more related," it might be possible that you end up with a minuscule generation or two in the town until some of the townies started dying of old age. This would only be temporary, since story progression will move new townies in if the population gets low, but it could make things scary for a bit.
The
perceived risk is that when story progression doles out "summary executions for game performance," the youngest sims are usually the victims. Babies and toddlers will start dying of starvation or other unnatural causes. Several players have found this to be unconscionable.
However, if you wanted to achieve this lifetime wish, you should be fine in doing so. It usually takes a
lot of sims to trigger this.
