The number of consecutive users is limitless unless its DHCP server doesn't reuse IP addresses as connections are dropped; if what he meant was concurrent users, 50 users is possible for 802.11a, 802.11b and 802.11g APs, too... it's just that once you get more than about 10 users connected and surfing simultaneously, session quality can be - as gcolquhoun and Elwin3 noted - "degraded"... and if even 1 of those users is downloading large files without QoS restrictions being enforced, all other connections might seem to 'lag' no matter how fast the reported connection speed.
Maximum true throughput for 802.11g using WPA2/AES (or no) security is only about 27.3Mb/s (less for WPA/TKIP or WEP). Maximum for 802.11n using 20MHz channels is about 65Mb/s - using 40MHz-wide channels the maximum true throughput is about 150Mb per sec. (WPA2-AES does not add throughput overhead, while TKIP and WEP *do* add 12-15% overhead.)
Dividing even 27Mb/s among 50 users could allots over 500Kbps for each one if you have a way to enforce Quality of Service (most modern routers do have QoS built in, but methods and quality of enforcement vary), which is still plenty fast for general surfing; that's 10x faster than POTS dialup modems. Watching vids on youtube without jerkiness/pauses generally takes less than 700Kbps (unless you're trying to stream the 720p or greater HD versions).
