I think your are looking at the wrong tools/domain. Text similarity search is a subdomain of its own - with countless tools and techniques that work far better than trying to align sentences. If you have not found a tool that works on terrabytes of data it just means you have not looked exhaustively enough.

You should be looking for a tool that was specifically designed to do this, blast will likely not produce results that are meaningful or easy to interpret. Sukhdeep's link already has some pointers.

Try Citeseer as a search engine to find what you are looking for: http://citeseerx.ist.psu.edu/