The limit is arbitrary, it has to have one as memory is not infinite.
I did notice a couple of things though.
1) It looks like it is a bug that you can continue to add rows after the limit is reached.
2) Dictionary could most likely do with a larger limit.
I think the 1000 limit was put in there because of the array editor, where you can have 100 sheets of 1000 rows and 1000 columns each, which can potentially be a ton of data.
In the case of dictionaries the limit could be much larger, because the columns are always 2 and there are no sheets.
In the mean time you'll have to deal with 1000 limit.