should go up to 3200 rpm or thereabouts. what you are seeing is excess fuel because the fuel for 3200 rpm is going in but only the air for 2000 rpm or so.
possible causes: turbo failure, blocked air filter, over propped, rope round shaft, dirty hull.
I have a 2003t on may boat, and cruise happily at 2500 revs. According to volvo specs the highest torque and most economical is between 2500 and 2700 revs, max is 3200 revs. so keeping the engine in that range is the best, if you have black smoke then you should check the injectors first to make sure they are atomising the diesel efficiently and not dripping.