It's most likely to do with the additional complexities required surrounding counting 4 digits, and displaying 4 digits on LCD screens. A chip that counts to 999 and stops before 1000 is probably much cheaper than a chip or IC (integrated Circuit) that counts to 9999 and stops before 10000.

Likewise, real estate on LCD screens is at a premium, so fitting in a 4th digit may be impractical without making the whole screen bigger. That and the component costs are likely to be higher, much like the chips.

I would hazard a guess that it's a decision taken by manufacturers on based on the cost/benefit comparison, following the principle that 999 should be plenty for most people, and that there wouldn't be enough additional customers to be able to recover the additional cost.

As an aside, but probably for much the same reason, you might see the available shots display on a digital camera only ever show up to 999. If you put a huge capacity card in that can fit 1000 or more photos, the shots remaining display on every camera that I've used will still only display 999. But it won't start going down until there are less than 999 shots left. It checks the free space, and estimates the number of shots, so 999 displayed essentially means 999 or more.