Yes, but I don't think it compounds forever. There is a natural thermodynamic limit somewhere. In practice if your company has a 1x code-base you are working for a decent company. If your company has a 5x code-base, you are working for a world class company.
EDIT: On the other hand, there is no limit in the other direction and that is where companies end up in big time trouble with a 0.01x codebase.
It's true, it doesn't compound forever, I think because eventually it is finished, and you don't want to add things to it. I think knowing when something is finished as opposed to adding yet another tool on a swiss-army knife is also an important skill. Otherwise you end up with a swiss-army ball of mud.
I'm also going to go out on a limb and say there's such a thing as a negative codebase. For example, let's say I have to work in a codebase for a particular political reason, and I can't rewrite something. But if that takes me 100x the time it would to do it correctly, then really the codebase is actually a net negative. One example of this is places that use an in-house framework for something (when there isn't a good alternative), but then a good open source alternative comes around. Of course you don't want to rewrite things all the time either, so I do agree there is a limit, but really I think that comes down to the code doing exactly what it should in the least complex way possible (with no bugs). Once you get there, there's nowhere to go?
EDIT: On the other hand, there is no limit in the other direction and that is where companies end up in big time trouble with a 0.01x codebase.