It's because the internet is full of monkeys: http://security.stackexchange.com/questions/33470/what-techn...
> Originally, some developer, somewhere, was working on an old Unix system from the previous century, which used the old DES-based "crypt", actually a password hashing function derived from the DES block cipher. In that hashing function, only the first eight characters of the password are used (and only the low 7 bits of each character, as well). Subsequent characters are ignored. That's the banana.
At my university we were forced to use passwords that are exactly 8 characters long, for some ridiculous reasons. And this was meant to be one of the top universities in Australia...