The servers can most definitely handle more, but the game itself is made to only run at 20fps. This is because Zelda Online was originally a browser-game made in Java. Stefan used a Java to C++ converter for a lot of the initial client, so a frame rate cap was probably put in to keep the game running the same. Stefan was probably being lazy when he never changed the frame rate later on, but it really doesn't need to be changed anyways.