I can only imagine that there must be core logic choices that are embedded by the camera that are not trivial to make dynamic without redesigning the hardware and firmware.
I think it's simply that their programmers are busy elsewhere, or perhaps the company is lazy about these things (wanting to sell you cameras with auto ISO - conspiracy theorists might detect a plot to sell the 5D Mark III brewing, in that they don't want the Mark III to seem like a small, safe refresh of the Mark II). Maybe both, but we have just gotten a couple firmware updates for other cameras, and the 5D Mark II's one shouldn't have been held back for the sake of adding in and testing some auto ISO features.
Given what I've read about Canon firmware - it's basically the camera's operating software on the main logic board, with other parts acting independently as devices, the firmware is updated all in one go (or perhaps piecemeal, but they still don't have any kind of automatic recovery to a good firmware like cheap PC BIOSes have). I doubt they've run out of space in the camera's internal memory; they give the firmware room to grow in case fixes or new features are needed.
Of course, it could be something like what you say, and there may be some assumptions in the code about how ISO is adjusted or limited that would make adding the user limit very involved. But I tend to think that it could be as simple as adjusting the limit which is normally the upper level of sensitivity. Of course, right now we already have something rather like Auto ISO limit in that you can select ISO expansion...the interface is just a bit clunky (at least on the T1i, heh heh).