Considering the significant nature of this regression, I nominate this issue to
be looked into further for the Darcs 2.0 release.

However, I understand the issue is largely with files *not* managed by darcs,
and this test case is sort of a "worst case scenario", because the tree is large
and no files are managed by darcs when the command is run. 

This wishlist item already in the system are related:

issue79: whatsnew -ls loads complete contents of added files into memory