I talked to Faceless, and he confirmed what I thought. Seems around that distance (3kish or whatever) is when the ships "spawn" in for a player. Anything outside that range basically doesn't exist for a player.
I enjoy hunting skelly pirates, but you have to be within 3500m or something to see them. It'd be AMAZING to be able to detect them outside of that range, up to 10k or so.