Performance is probably the biggest problem - doubling the map's width and height means it takes 4x as much RAM and disk space, and certain algorithms that process every tile (AI scripts, pathfinding-related stuff, rendering, etc) will take 4x longer, and you'll probably need 4x as many trees and rocks etc so that'll all go slower too. Designing the engine to work independently of the size of the map (as is necessary in e.g. MMORPGs) would add significant complexity so we've assumed the maps are small enough to load and process all at once.
There's a few strict restrictions because of other assumptions the engine makes, e.g. if it's larger than 724x724 tiles then the pathfinder will complain of integer overflows, and position datatypes will likely run out of bits at 5792x5792 tiles (or probably much earlier), etc. I think currently the Median Oasis map is 256x256 tiles, so you'd have to be quite a lot bigger before hitting those limits