FYI a new version of the inotify patchset was sent today for review:
https://lists.linuxfoundation.org/pipermail/containers/2016-October/037480.html

This approach is the real fix for the inotify part of this problem.

For open files, we've had a few reports of systemd occasionally
misbehaving and dropping our bumped ulimits on the floor, this may be
what you've been running into...

With ulimits bumped and the inotify resolved in the kernel, the next
likely limit we'd hit is pts_max, but assuming normal uses of 2-3
devices per container, it'd take quite a few of them to reach the
default limit of 1024.

Anyway, those kind of kernel limits are something we're quite aware of,
I actually am flying back from LinuxCon where I gave a talk covering a
bunch of those problems and we'll be pushing at Linux Plumbers in a
couple of weeks to try and get proper solutions in the upstream kernel.

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https://bugs.launchpad.net/bugs/1602192

Title:
  when starting many LXD containers, they start failing to boot with
  "Too many open files"

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