This is arbitrary limit in the sense that it is practical limit of FAT32 filesystem. In theory FAT32 can extend to bigger sizes too but the FAT table grows in size and may be too large for some consumer devices (cameras, PDAs,..) with limited RAM. Also Windows refuse to format filesystem over 32GB with FAT32 and offer only NTFS. Otherwise there is no problem so no firmware upgrade needed. I'm quite curious how SD Association will approach it, 64GB is near. I guess they will just stick with FAT32 for a little longer or maybe remove filesystem requirement from specification.