Does that mean if you run the CPU too much, it will die quickly? Is there some low limit on time at full power? Electromigration problems, perhaps?
That would be my bet. They probably assumed based on typical workloads, a certain percentage of the time, the part would be asleep. Which is generally a reasonable assumption for non-server parts.
More sleep means less activity, and less heat (which accelerates EM)
Is this the limit for CPU speed and transistor size?
That's really disturbing if true. Poor power management has resulted in devices being warmer than they need to be and shorter battery life, but that seems trivial in comparison to the hardware actually being damaged. IMHO I would consider it a flaw if a CPU did not last effectively forever at full load --- older OSs which lacked any sort of power management basically kept the CPU in this state all the time, and there's plenty of old hardware around and working to show that it isn't unrealistic.
It seems they're heavily sacrificing lifespan for performance, which is attractive to (most) users and also builds in some planned obolescence, but it's sad that what was once considered to have indefinite lifetime is now almost a consumable. To use a car analogy, this is like moving from a conservatively designed engine that lasts hundreds of thousands of miles but only produces 100HP to a top-fuel dragster engine that can produce thousands of HP but can't run at full power for even a minute without destroying itself.
I still do all my development at home on an i5-2600K and an i5-2430 laptop, neither is noticeably slower than any of the new machines I've used (both have SSD's).
I'll probably run this desktop til it dies as there is no compelling reason to upgrade.
The US applies export controls to radiation-hardened ICs, which has resulted in a dearth of rad-hard ICs. Nobody wants to run a silicon on sapphire fab any more.