This is a very good question! How Large Can Blocks Be?
This is one of the questions that many are asking at the moment. It seems that the Gigablock initiative may be able to find the answer.
Credit
Bitcoin Unlimited, nChain, and the University of British Columbia (UBC) have teamed up to bootstrap the Gigablock Testnet Initiative. The goal of the initiative is to determine how large blocks bitcoin can handle, and to analyze the bottlenecks that may impede bitcoin’s scalability.