yes excellent work without a doubt, the filesize is a major factor considering the amount of objects.

tools? automation, possibly such as an ESRI export to SU or kml soruced from a relational database holding polygon attributes (height, color, elevation etc)

my guess would be it is a geo-refferenced arcscan (scanned image, raster lines converted to polygons)

If you turn the model on/off you will notice a registration error of building footprint to GE's Aerial offset. Possibly due to GE SU .kmz export or some other projection error such as GE terrain elevations, geo-referencing error in conjunction with orthographic / oblique views

this model reminds me of promotional adds by ESRI such as those shown at the ArcGIS Explorer Showcase , big difference here being single color for the indidvidual building.

In ESRI's Los Angeles Model , building structure annexe's and roof top objects differ in color on many buildings


this textured model with representations to symbolize features and single user file_geodatabase's (acgis9.2 enhancements) will add new dimensions to the development of 3D Globe Documents(.3dd).
ESRI's ArcGlobe was released around 6 years ago and their new release of ArcGis Explorer will provide "spatial analaysis" along and .kml support.