You want to look at /proc/sys/fs/file-max instead
From recent linux/Documentation/sysctl/fs.txt:
file-max & file-nr:
The kernel allocates file handles dynamically, but as yet it
doesn't free them again.
The value in file-max denotes the maximum number of file-
handles that the Linux kernel will allocate. When you get lots
of error messages about running out of file handles, you might
want to increase this limit.
Historically, the three values in file-nr denoted the number of
allocated file handles, the number of allocated but unused file
handles, and the maximum number of file handles. Linux 2.6 always
reports 0 as the number of free file handles -- this is not an
error, it just means that the number of allocated file handles
exactly matches the number of used file handles.
Attempts to allocate more file descriptors than file-max are
reported with printk, look for "VFS: file-max limit
reached".
EDIT: the underlying error is probably not the system running out of global filedescriptors, but just your process. It seems likely that the problem is the maximum size limit of select.