there isn't a maximum size imposed by powerstore, the maximum size is determined by the server.
resizing the image uses a lot of memory on the server. The larger the file, the morte memory from the server must be used.
If the server does not enough free physical memory available to handle resizing the image, you will get the error you are reporting, regardless of the setting you use for the memory limit.
APower store will only be able to use what is available for image resizing.