20 billion is the limit - morale drops exponentially from that point on up to 25 billion. Upwards of 25 billion has no increasing morale defecit - however by the time you finish building all the necissary farms and multimedia centres to get that far, you would have been far better off sticking with 20 billion and build stock markets.

how happy are you standing in line to see a sporting event or concert and every year that line gets longer

so it is reasonable that the higher the pop the less effect of the happy sites

Does that stop people from going to the Super Bowl? In relative size, each "Square" is larger than the North East United States, meaning that's a lot of s*** to do; and when 1/6 of the planetary tiles are spotted with em, I don't want to here any bulls*** about them getting bored.
It's simply an effect of time from what I've observed. In 2226 I could build a VRM that provides 60% entertainment on a 10B Pop world, then see that same VRM provide only 20% on a 6B Pop world.
So if I hear any crap about them simply becoming less entertaining, I'll point you to the numerous tourist atractions and year-round crap states and nations run that simply become more ardous and traffic-blocking, but still fun to watch, each year.

there is no point in arguing about the logic of morale in the game compared to real life.

first of all in real life, morale effects population growth in quite the oposite fashion as to in the game. Overcrowding does not impact morale all that much in real life since it is somthing people have grown up with and are used too.