Recent advances in wireless communications and MEMS technology have led to the development of wireless sensor networks with a large number of small sensing devices. Most of these wireless sensor networks are motivated by the increases in sensing coverage and performance that can potentially be achieved through effective sensor data fusion. However, as the density of a wireless sensor network grows, the likelihood of transmission collisions among sensor nodes can increase simultaneously. In this paper, we consider a class of wireless sensor networks and show that there can exist fundamental limits on their performance based on recent results on the capacity of wireless networks. We study a simple distributed detection problem with wireless sensor networks and investigate the scalability of several common data fusion architecture under appropriate assumptions on the sensor models.