[lawnchair]

From my experience the problem at scale isn't that Terraform stops being useful. The problem is how state gets managed. Every IaC approach still has to coordinate changes across shared resources and none of them escape that. Other tools just shift the trade offs around. In house systems usually end up rebuilding the same thing in another form.

At scale the choices are pretty simple. You split state and live with orchestration glue. You move to a controller model and take on the operational overhead (see Crossplane). Or you keep a cohesive graph and fix the state layer. Those are the real options (imo). It's not about outgrowing Terraform.

[linuxftw]

Changes across shared resources should be few and far between. Terraform really should only be used to setup long-lived resources, such as your VPC, initial IAM, and a bootstrapping system/management plane (eg, your kubernetes cluster). Once your infrastructure is up and running, further operations should be api-driven (aka controllers).

I'm not really a fan of crossplane, it's much simpler to roll your own custom operator, especially now that things like the Azure Service Operator exist (I think there's something equivalent for aws as well). This gives you a lot more flexibility for writing unit tests for your business logic.