The system was originally designed for a world which was not online, or at least could not be relied on being so. A number of defaults are based in, which can then be overridden as systems contact each other.

Whatever limits you have in your home country, foreign ATMs (and sometimes even non-foreign ATMs on a different network) may default to separate limits for a transaction, for transactions from that machine and for total amount allowed from that network. The limits are based on the issuing bank of the card. Of course individual ATMs can have per-transaction limits based on their own policy.

Actually a similar system applies to visa/mastercard credit cards. Whatever your limit at home, when you go overseas, a "default" limit applies - though generally the real limit will catch up later - perhaps within seconds. That's why the first time you use your card overseas it can work fine, then suddenly stop working (even though you know it should be OK) and the next day its all OK again. Its because the first time you used it a separate "local" limit may have been set up if the network couldn't get the information over fast enough or the home network is playing it safe.