My understanding is, in the early days, you could send an SMS to Twitter to post, so the limitation was imposed by SMS and not necessarily Twitter.
No. The twitter were build with the limit in mind, in fact it is its whole spiel.
Why? It's not thar deep.
It games the attention span of viewers. You can read 3-4 articles before getting tired or going about your day, but you can guzzle infinite number of twits, because they are small, engaging and various
It not only games the viewers but posters too. Maybe you want to write an article, or blog post, but you know it's going to be long. So you better do it on the weekend. Or when you have more time. Which for many is never.
But writing a couple sentences? Easy! You can do it on a bus! You can do it on the toilet! And, if everyone is on the same level as you, you don't feel bad for keeping it short.
The struggle itself towards the heights is enough to fill a man's heart. One must imagine Sisyphus happy.