The reason for that limit is that the bigger the completed block, the longer it takes to propagate. If it's too big, it takes too long and you get network forks.

Right now they're working on a solution. Since most of the miners already have most of the transactions, you can propagate a small fixed-size block that lets them reconstruct the full block from the transactions they already have.

This fixes the delay and the forking problem, so you can put many more transactions in the block. Your limit is just the bandwidth to transmit the transactions. Typical home broadband can support tens of thousands of transactions per second.

The storage of old transactions is another issue, which they plan to address by pruning old empty addresses.

Inane comment.

The limit will be changed before you know it.