Hummdis
>...but I couldn't find anywhere about having trouble restoring that
> specified that there was a size limit on the archive that you can restore.
Search again on backup & go back a year or two & read more slowly, there are dozens of posts about this, some fairly recently too.
> If it's been an issue for so long, why has it not been addressed?
It's being addressed, but no one can find the exact cause of the limit, again if you search you will see numerus threads discussing this, also look at the devinfo mail list archives & bugzilla posts.
The very popular backup2ws & backup2 used rar which was not GPL so the developers never included that in the base. Recent work with dar (which is GPL) is promising, so in time there may be a better backup solution as part of the sme base code.
> System backups are much larger now...
> I could only imagine the problems this causes on larger installations.
There are add on contribs that have been available for a few years now eg backup2ws, backup2, dar2 that cover this requirement as well as e-smith-backup-dar implementation & some others too, search and you will find them. The first three create a backup file split into contiguous 2Gb parts to workaround the problem.
You could always install one of the above & do a Disaster recovery type backup, see dmay contrib area.
http://mirror.contribs.org/smeserver/contribs/dmay/