You're assuming all paths are created and consumed by humans. Automated processes could easily generate and work with long paths for perfectly-valid reasons. A limit this low causes grief for people that "deserve" better.
Yes its freaking annoying, but I think having a path > 260 chars or a need to pass 5000+ bytes in as line arguments all count as "code smells".
If you are hitting these issues, something else is wrong and in my experience, fixing the other things is much much more productive.