It was a purposeful addition (Though I do feel like it should be recording vertical segments separately which would allow more to be placed in a single chunk as long as at different y levels etc).
It is mostly a client-side performance consideration yes, and whilst it may be strict right now, it can easily be lifted to a higher value.
It is effectively, to stop people making a big block of 100,000 complex mesh blocks that would grind everyones computer to a halt when they get close.