When applying any PPP protocol it add overhead to the packets. The MTU settings for standard windows is 1500 bytes. If the site-to-site connection adds to those packets, they can be too big to go through your VPN pipe. This is called Maximum Segment Size Exceded.
It's like trying to shove a golf ball through a garden hose.
With MSS exceded, you must have ICMP to renegotiate the packet size and split these packets up into smaller chunks. This is called PMTUD (Packet Maximum Transmision Unit Discovery). If ICMP for segement size is disabled, you will end up with a packet that will NOT reach its destination. So, TCP will ask for those packets again and again and again. The problem being is you are flooding the VPN connection with repetitive sending of packets, as well as having to resize the packets.
Also, think of a VPN connection as adding overhead to the packet for 1) routing the packet 2) encrypting the packet.
An article you should look at is this one from Cisco:
http://www.cisco.com/en/US/tech/tk827/tk369/technologies_white_paper09186a00800d6979.shtmlThe anser can come in two forms:
Allow ICMP to renegotiate the packets
and/or allow your tunneling adapters to route larger packet sizes
Please NOTE: You can seriously hose up network performance by messing with these. In a large business like this with 120 sites, it is worth while to hire a consulting network engineer on this project.