If you do 10k DPS from your direct damage then Ignite will (with base mastery) top out at 4k DPS. At that point you're pooling Ignite damage at the same rate it's trickling out. For simplicity, we'll assume you can do 10k just by spamming Fireball. Cast speed of 2.5 seconds, so each Fireball hits for an average of 25k, and then generates 25*0.4= 10k of Ignite, split into two 5k hits.

It takes a bit over ten seconds of spamming this 25k Fireball before you're spending Ignite as fast as you're generating it; more mastery doesn't change this figure, since the expenditure scales with generation.

I think you are thinking of how ignite worked in Wrath, where it was actually bugged and kept stacking. Ignite hasn't stacked like that since 4.01. I did a whole bunch of mathy posts on it over a year ago that explained the situation, if you feel like digging into my wow insider post history.

Simply explained, it still uses a bank, but it subtracts the damage from the bank when the ignite dot ticks, so it doesn't stack to infinity anymore. At the end of wrath, I was seeing some mages get their ignite ticks up over 100k. It was kind of a buggy trade-off for ignite munching at the time, but by the end of wrath it did end up being pretty OP.

My only concern with the new ignite is will it fix the munching. Color me skeptical. Frankly, I would prefer less dots and less passive damage in my fire tree. I want my fire tree to be the "I'M HURLING BIG BALLS OF FIRE THAT ARE ASSPLODING IN YOUR FACE" damage tree, not one that is using lots of dots and passive damage like ignite. Put back a little bit of that big-nuke thing that Pyroblast used to be, and what a 4-stack arcane blast currently is.

It won't be OP because the damage of your other spells will be adjusted accordingly. It would be OP if they pushed that change into a minor patch. Fireball spamming alone could do 20k damage without being op if they want. They would simply nerf everything else to ground and then some. The stronger one spell is, the weaker the rest must be to maintain balance. In other words, don't worry about how powerful this pre-alpha iteration is.