DNN can absolutely handle what you're asking it to do and very well.
We've got one site with about 150 child portals for a club and it's working well, all with a similar theme, but some original montages to reflect their local environment.
I made sure each had their own sub domain / parent install and they are branch.domain.org format, although having said that we've created for another client several child portals with their language as being their domain name in a child portal instance, eg.. domain.org/en domain.org/fr - it works well too, so if you think it's going to be easier for the customer to remember. However, if you go down that path you can't have pages within the website called what the child portals are - if you get my drift.
Using child portal instances also puts a folder into the root directory of the portal name, which I prefer not to have, but that's just my personal preference.
So yes, the good news is that you can have hundreds of child portals in a dnn instance, and the main consideration performance wise is what's going to be on each of the child portals, and if they require membership access. I have found that the most overhead with DNN is the amount of members and administrators logged in making changes to the site.
If I was going to have some simple brochure sites with a bit of information about the business, with the occasional updates, maybe some automated rss feeds, like we're using, you could have in the hundreds without issue.
Hope this helps.