the reason the limit is set to 50 is to preserve space and bandwidth as you might have guessed.
The limit of 50 pms was set some time ago now
vbulletin has to keep a track of all of them in the database, When the cron jobs are run, they also clean private messages.
honestly i dont see why you need more than 50 messages. If you require more for sales records or whatnot you can request more but if its just there for sake of keeping, its a waste of space.
I will talk to swank however and maybe 100 will be better...
stay tuned