Takeaways:

• It is possible to list a directory with 8 million files in it.
• strace is your friend
• Don't be afraid to compile code and modify it (hell, simple C compiles so fast it could be interpreted)
• There is no good reason to have 8 million files in a directory :-), but this was a good learning experience (and possibly a good interview question).

The last point is the most important :D