Arduino Regulator: How hot is too hot?

you already answered your question

How hot is too hot?

It's upper limit is 125C

would I want to run it at even 60 something? not really but your only over half way to deaths door (add 10 or so more degrees for actual die temps)

That being said I have never liked the thermal management on official design boards, there is just no real reason for it to get as hot as it does, I have 1+ amp loads on regulators that hover around 60 degrees and I raise a brow