I might be misremembering it, of course. But it seems to me that before the current 1.20 version the sky was closer.
I tried flying up at the maximum speed my MystiTool gives me. Somewhere around 50km the sky starts flickering black, and at 100km your prim attachments start jumping around you as if you’re falling apart and dispersing in the air — apparently, height is stored as a floating point number, and the precision required to keep them around relative to your avatar is drained by the bits that go into the height. Very surreal.
It takes about half an hour to fall down from there, since the fall speed is capped at about 52.83 m/s, so I’m using this time to blog about it. 🙂