It's annoying, but I don't think it's silly. The limit's there for a reason. I mean, can you imagine if someone had a signature that was, like, a paragraph and a half long? It would take up a lot of space on every page every time that person posted, and it would probably take up a lot of hard drive space (or whatever that stuff is called). Same thing with the Avatars. Yes, it's annoying when you find something that would be perfect if it were two or three pixels smaller. But the line has to be drawn somewhere, or people would end up with Avatars the size of I don't know what, taking up page/ hard drive space. So really, it's just that darned "logic" thing kicking in again.
And besides, if there wasn't a limit on signature size, then mine just wouldn't work...
(In case some one reads this and I've changed it, my current signature is: "Concise" is when the post is shorter than the signature)