For the Techies:
Computers operate using a base-2 number system (Binary) - data is either a 0 or a 1. There are 8 bits in a byte. With 8 bits in a byte you can represent 256 binary combinations (from 0=00000000 to 256=11111111). The number of rows and columns is a by-product of this binary number system. 256 is 2, raised to the eight power (2^8), which is the maximum value that can be stored using eight bits.
The number of rows in a worksheet is 65,536, which is 2^16 or 256*256 (256*2).
For the conspiracy theorists (sighted on Net):
If you look at the number 256:
2 = B = Bill
2+5 = G = Gates
2+5+6= M = Microsoft
For the cynic:
Limiting Excel means that some people are compelled to use MS Access. A viable Access market means Microsoft can lay claim to being in the “database business”, in addition to spreadsheets, word processing, project management (MS Project), web browsers etc. etc. etc.
For the hopeful:
Increasing the current row and column limits will apparently require a complete re-write of the MS Office suite, not just Excel. Don't hold your breath
Regards,
Mike