I'm pretty firmly against the AoE cap, as just about everyone who posts on this forum seems to be. However, I believe technological limitations explain why Zenimax simply could not appease people on this issue. Another explanation is that they believe so firmly in this design decision that even a very large and vocal group could not persuade them to change it, but that seems unlikely to me. Another explanation might be that it would through off the balance they've been working on for so long because they'd be changing a fundamental characteristic about how the combat system works. This might lead to different problems that are just as significant. That seems a bit more likely to me, but still not completely satisfactory.

My guess is that the real reason they have the limit is because they don't use tab targetting. That means, so I've heard, that the network load is significantly higher than it would otherwise be. The game has to do all sorts of checks for who is being hit and who is not being hit and it has to send this information back and forth between the client and server to double check to make sure no one is cheating. Doing this with AoEs that only hit 6 targets is probably difficult (hence the lag people experience in Cyrodiil already), doing it with AoEs that are potentially hitting 100+ people at once is probably literally impossible.

To further support this hypothesis, there's GW2. This is the only other MMO I can think of that limits AoEs in this way. It's also the only other MMO I can think of that has a combat system that's basically uses no tab targetting. GW2 also experiences skill lag, as in ESO, something I've never experienced in any other MMOs (which are all tab target based). These are only correlations, of course, but the possibility that it's all just coincidence seems unlikely to me.

I wouldn't be surprised at all if Zenimax themselves wanted to have unlimited targets for AoE. They've taken other measures to support small scale fighting, and they've talked about their desire to support small groups numerous times. Why would they knowingly choose to create a combat system that gives zergs an inherent advantage if it wasn't absolutely necessary due to technological limitations?

So there was a choice. Either we'd have to play the game with a straight up tab targetting system and unlimited AoE targets, or we could play the game with the current action based targetting system and have AoE caps. They went with the latter, which isn't surprising at all considering that an TES fan would probably abhor the former, and this is, after all, supposed to be a TES game.