Butcherboy,
You're right, the losses are proportional to distance and these losses can be reduced by using HV DC cables (high voltage direct current).
Your limits are dictated by the voltage level and the size of your cable. Higher voltage and larger cable size will let you transmit more power (basically the same a pipe for water, higher pressure and larger pipe size).
It is expensive and the economic feasibility would be determined just like any other project. Cost, funding, pay-back period, income, timing, etc.
It is technically feasible, the Bass-link is the best example in this country. The bigger issue would be the contracts between the two countries, for instance if there is a fault on a line and consequently a line to Asia is taken out of service. There are massive implications to this type of loss of power.
Anyway, I hope Oz does go down this path of exporting power to Asia as our sunlight (or other renewables) are an endless supply of clean power. Many jobs are created in this industry, mine was.
Butchy.
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