This limitation is not "weird or arbitrary" but based on the technical capabilities of Android phones in these days.
And those limits were later changed and will surely be changed in the future as smartphones get more powerful.
All kinds of limitations are in place both on Android and iOS, particularly when it's about the amount of memory an application can access or the amount of background processing an app can make.
If you don't have these limitations, then apps could affect not only the functioning of other apps, by grabbing and keeping all available memory, but also that of the phone itself, by draining the battery in 1 hour.
That's not something that the average smartphone user would expect or desire his phone to do.
Edit: I'd also like to add, that almost anything a developer creates is usually created with some limit, or at least some expectancy of costs in mind.
For example I couldn't imagine that someone creates a memory cache, where the limit = infinite without a really good reason. Or an API where the request limit/sec for any client = infinite.
You usually develop something in a way, that reduces the cost of some computation as far as possible, and when it still causes problem - introduce hard limits. Especially when it's a whole ecosystem where many companies/developers participate.