Based off of player testing, collision calculations seem to be the largest culprit contributing to why the limits are kept so low. It's easy to verify this by placing a large number of items with collision in a tight area and watching your performance drop.

That said, a better solution would actually be doing the opposite of what's suggested by the OP, and break furnishings into even more categories. Specifically, Traditional Furnishings which have no collision need to be separated into a new category, as they don't have as great of an impact on performance. Examples of non-collision items include various small plants, rugs, tapestries, etc. This would allow ZOS to lower the Traditional Furnishing limit, but simultaneously increase the new collision-less category by a greater amount, giving a much needed boost to the current limits without significant performance loss.

When looking at the current furnishing categories from a performance standpoint, it makes clear sense why they are broken into their various categories.

• Traditional Furnishings - Any furnishings not falling in another category.
  • By creating a new "sub"-category for no-collision items, the overall furnishing limits could be greatly increased.
• Special Furnishings - Larger furnishings composed of elaborate particle effects, so limited due to their high performance cost (ex Butterfly Flock and Mists of Hag Fen).
• Collectible Furnishings - Count as part of your Collections, not as individual inventory items, therefore unable to combine with Traditional Furnishings category.
• Special Collectibles - Mounts, Pets and Followers. Animated so higher performance cost. As they are part of your Collections, they are more akin to Collectible Furnishings than any other category.