From my experience, the limitation seems to be with Mentalray and how it handles memory and not with Forest. It might also just be the 3ds max incarnation of Mentalray... can't really speak for other packages.
I used another popular scatter plugin that was originally made for Vray, but Forest seemed to be much more optimized for Mentalray (I did think the other plugin was more intuitve to use though).
As for the reason I used proxies... The file size started to become an issue and that affects load times over the network with backburner. I never could render the scenes with pure mesh geometry also. The proxies just make me sleep better too...Huge difference in the file size.
I have settled on Forest for this project because it's doing what i want. that is not to say that there aren't other solutions that work.
A really good thing to do if all else fails is to separate your Forest scatter elements into as many differerent entities as possible. For example I have a Conifer Forest scatter that's separate from the ground shrubs(multiple scatters), deciduous trees, rocks etc. I have about 7-12 Forests scatter elements in each scene. It makes it easier to control and more straight forward to render out in passes to save memory and time. I use the "render subset of scene/masking" in the camera shaders lens slot to render out each pass. You can also just use the matte/shadow/reflection material or separate matte render elements using pre-assigned selection sets for each Forest.
Hope it helps.