Placing too many units might cause them to wait and stand still for awhile when ordered to do something/somewhere for like 0.5-1 second... it looks like they turn to the point where you order them to go and after that freeze of theirs they move... It's not something like a pc lag the fps runs smoothly but the units even on single-player do this, I've seen it many times in many maps...
It is only if the units have to move and is caused by how WC3 handles computing movement. You can own 1000 move-able units and 12 of those units will still move fluidly if they are the only units moving.
There are two steps to moving a unit.
1. Path finding
2. Actual movement
The problem is caused by 1. WC3 keeps a circular list of all moving units for every player. Every game frame for every player it picks the next unit from the list and then runs the path finder on that unit. The result of the path finder is a "mini-move" order.
A mini-move order is a vector specifying a direction and distance a unit can safely walk to make it part-way to its destination. The key here is part-way, it is intended to only give enough walking distance until the unit is picked once again by the path finder and a new mini-move calculated. Of course the unit may never reach the end of its mini-move as in the case of only 1 unit moving, it will be getting updated constantly. The distance of a mini-move is not constant, complex pathing areas compute shorter mini-moves than large open spaces.
Part 2 does not help the problem. In addition to rotating and moving a unit towards a mini-move, it also handles unit to unit collisions. The collision handling algorithm used by WC3 is to cancel the current mini-move. With a few units this works well because it gives chance for the unit in front to move out the way or the pathfinder algorithm to work out a way around the units and since the unit will be given a new mini-move very fast it makes no difference. However if you are moving hundreds of bulky collision units you cause catastrophic trashing of the system.
During trashing, each unit is given a mini-move very seldom (seconds, humanly noticeable) as there are hundreds of units to update. However since the units are very tightly packed you get the problem of each mini-move only lasting a fraction of its intended distance as the unit very quickly collides with the one in-front. This causes movement slowing from both sides, not only a lack of mini-moves as their occupying time is less than the time between refreshes, but also because each mini-move is interrupted early. The end result is a huge army of hundreds of units moving like a caterpillar, 1 unit at a time forward in a chain.
So how do Tower Defense maps have hundreds of units moving at the same time without that problem? They distribute mobs among many players. Each player gets a pathfinder iteration per frame so two players can move twice as many units at once as one. They also give the mobs low or no collision, so they are allowed full mini-movement distance. Finally they use large open spaces (the paths) that allow long distance mini-move calculations.