Re: Why should there be any limit ?
I think, as AC stated bellow, they are probably covering their arses with the limit. Many people don't protect their store account, and a couple of clicks charge them whatever price for the app.
I think I'd go a different route: Allow the user to set a spending limit (possibly per transaction, maybe on a rolling week/monthly basis). Set the default fairly low. If a transaction will take you over that limit, a password is required. Possibly, for greater security, have a second stage of security for large purchases.
However, for app developers, there is another route: Require the user to buy a license key. For those few apps which need it, particularly business apps, it wouldn't be enough of a hassle to put users off, and they could do volume licensing deals etc. Also, Google wouldn't be taking their cut.