What limits the size of a telescope on Earth?
The short answer is the cost.
Technically there is no reason to have a maximum size for a telescope.
Practically it is a difficult task to build a gigantic mirror. Nowadays the biggest mirrors are done segmenting in smaller mirrors assembled together. The total weight of the mirror is a problem especially because it has to move mechanically with big motors.
But everything is possible if there are enough resources, so there is no physical limit.