I read on some threads (older), that the maximum server view-distance is at 15 (rings of chunks around you).
I tried 32 and it worked. My client won't render further than 32. Is it still possible to surpass this value, if you increase the server view-distance? On the server side it shouldn't make much of a difference because mobs will despawn after they are 128 blocks away from you. The additional traffic will be caused by sending additional "static" chunks, that won't create much lag as I suppose.
On the client side: Why is there a max of 32? Does that make any sense? In the end, it's the user's fault if he wants more but doesn't have the hardware to do it.