Star schemas are used to improve the performance of large datasets in SAS. The document discusses how a client had tables growing to over 1TB in size that were taking hours to build and query. By implementing a star schema using the Scalable Performance Data Engine (SPDE) and StarJoin, the table build time was reduced to 30-40 minutes and query times became seconds to a few minutes. The SPDE allows data to be partitioned across multiple servers and devices to improve scalability.