Exploring/loading too many chunks causes world to become laggy when updating blocks

After exploring a newly generated world (or updating an existing world that has been explored) for about 400-500 blocks in any direction, block updates start to cause noticeable lag.

To recreate:
Create a new world
Explore for several hundred blocks in any direction
Try to break blocks or create a redstone clock
OR
Update an existing world that has been explored for several hundred blocks in any direction
Try to break blocks or create a redstone clock