Nah, if I remember right, it's because we wanted players to build near each other. A problem with some of the older Graalians servers is that people would hop on, spread way out, and everyone would be miles apart. It didn't feel like a "community server", especially when you could walk around for hours and not find anyone else. I guess the border did feel restrictive, but I'm not sure how you'd go about incentivizing people to actually build near each other and not have the problem of everyone spreading out again.
Would be all for another server again sometime, if somehow we could ever get that working again. It's just that people always seem to lose interest in the server after a week, and then leave. Been a huge problem ever since like 1.5.
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Just tell people to build their houses near eachother and allow people to have some teleportation command to easily get back to the spawn, it's all that's really needed if you're not allowing random people on the server anyways.
Being limited to a specific area gets boring really fast, not enough to do that's worthwhile and you barely encounter anything new as everything you have access to you've basically already done or seen.