Ext3 Filesystem Explained
This is a pure userspace and login issue. Problems will arise from ftp or
other services authenticating you though, because ftpd would also need to
know as which group member to do file access. It could use ~/.group as
well or use some site specific FTP extension, again a user space issue.
I still won't suggest anyone to do it as it is pretty non standard.
With regards to NGROUPS, I'm sure it can be easily raised. It might be
possible to handle it fully dynamic, but you still want to have a hard
limit to stop a gone mad process to be in a set of almost 2^32 groups.
Also there is a performance issue, any file access will have to loop
through the list of groups to determine if you have access or not, so you
want to keep the list small. If longs lists of group were allowed I'm sure
one can optimize this with a binary search in a sorted list of groups, but
this won't help much in conjunction with ACL's then.