Honestly thought the loot cap was added specifically due to server lag since so many people were hoarding sh*t. I also thought I read that from a dev somewhere a couple years ago too. I thought kind of the same with why bugs were taken out of houses but that's a complete different reason, and THAT reason I understand fully.
My point in saying that was kind of a joke, too, since it seems whenever the admins add anything new or increase something there's always some kind of performance issue, but I digress. Maybe my phone's getting old or something, it has a tough time running graal nicely anymore.