In my experimenting I went ahead and also disabled DRS. With the 42 VMs still running (21 per host) I then tried powering on a random machine and I got this error:
Why would it throw this error?
According to the official vSphere 5.5 Configuration Maximums: http://www.vmware.com/pdf/vsphere5/r55/vsphere-55-configuration-maximums.pdf I am nowhere near the limit of VMs!