Most likely because expanding retainer storage means fragmentation in the database, so while it's easy to expand it, it means the game needs to be offline for longer to convert everyone's retainers into the new storage domain, which may cause irrepairable damage if the expansion routine has a bug. So in the end they chose to extend the current system ("don't fix it if it's not broken") instead of modifying the system.

Also, sorting retainers consume less server resources if each time you only sort 100 slots instead of 300 slots.

I'm very unhappy with the split retainer design, but I can live with it.