/bin/grep: Argument list too long

$ xargs --show-limits

Your environment variables take up 14474 bytes
POSIX upper limit on argument length (this system): 2604918
POSIX smallest allowable upper limit on argument length (all systems): 4096
Maximum length of command we could actually use: 2590444
Size of command buffer we are actually using: 131072

Execution of xargs will continue now, and it will try to read its input and run commands; if this is not what you wanted to happen, please type the end-of-file keystroke.
Warning: /bin/echo will be run at least once. If you do not want that to happen, then press the interrupt keystroke.
^C