SMTP is a line-oriented protocol. The server processes one line at a time, and needs to understand headers.

Infinite line length = infinite buffer. Even worse, QP is 7-bit (because SMTP started out ASCII only), so characters >127 get encoded as three bytes (equal, then two hex digits), so a 500-character non-ASCII UTF8 line is 1500 bytes.

It all made sense at the time. Not so much these days when 7-bit pipes only exist because they always have.