MineCraft is awesome, good to see a fellow player here.
Simply spawning thousands of objects in DBP without doing any other optimizations is definitely going to slow down your game. MineCraft has a rather good system for optimizing its objects, so that only the absolute necessary objects are drawn. You could definitely get something like this working in DBP, but it'll be more work than simply spawning objects and "forgetting" about them.
First of all, as mentioned above, MineCraft uses "chunks" to handle the rendering of large sections of the level. This helps because you can group many cubes together in bulk when performing certain checks. For example, instead of checking if all 128*128*64 cubes are in camera range, you can simply check 8*8*4 "chunks", and then if those are in view, you handle the smaller objects that are located in each chunk, etc. If you have truly massive levels you might even have some nested chunks! As mentioned earlier, you may want to look into how BSP trees work to help with this task.
As for rendering, DBP uses backface culling by default, but you also want to hide (or delete) objects that are impossible to see from any angle. In MineCraft, for example, blocks that are completely buried in the ground aren't ever drawn at all. Only as you delete blocks and dig down, do the faces of the behind blocks "appear". So rather than using whole cubes, I would work with individual faces, and always check the adjacent cell to see if it's solid or not before you decide to actually draw the face.
Also, (although this might be more of a challenge), you might look at consolidating large numbers of small faces into fewer polygons. For example, if you have a 10x10 wall, instead of drawing 100 faces on one side, your engine might automatically detect that and simply draw a single face that's scaled to fit the same area. Of course, this may also mess up your lighting when you have few vertices spread far apart (unless you're using a per-pixel lighting shader), so you should think about that before attempting this method.
Lastly, you can always set your draw distance smaller and use fog to hide it.
Good luck!
