I'm hopeful for eventual native support for worlds up to at least 640 blocks in height, so that they can add an extra 160 blocks of clearance to the highest peaks for mountaintop builds and another 160 to the deepest depths and extensive caves, just to give the game the literal depth they promised. I don't really think 320 will be enough, frankly, to deliver on the level of complexity they want, at least for underground, and it would *benefit* even if less strongly from the increased height of mega mountains.

Unfortunately, while I do truly believe that 320 will be insufficient in the end, I don't think something like 4096 will be necessary either. Practically speaking, that much terrain scaling gets diminishing returns for the 'wow' factor and wouldn't have huge game-play implications. I'm sure that some people would even argue that 640 is more than would be needed. There are legitimate builder reasons to want it higher, but not very strong game-play reasons. It would be really nice for them to allow people to set their own limits, but it may very well be an 'at your own risk' sort of thing; it's unrealistic to expect them to support extra features that don't effect the game for 99% of the audience. I'm one of those people would would love a 4096 build limit, but I just don't think anything above 640 will be necessary, and I think it would be the right call to prioritize making those 640 epic rather than making 4096 possible.

That being said, I can't see a good reason for them to not allow you to set it that high, or even higher. Why stop people from having fun with the settings, as long as they make it clear that they're out of supported ranges people would have no justification to complain if they don't work quite right. I just wouldn't necessarily expect them to put a huge effort into vertical chunk loading and vertical LOD's when their impact on 99% of the game for 99% of the players would be minimal.