All technology has its limits.  And in the case of data storage, the crucial limit is how much data can you pack into a given space and still make sure it doesn't get corrupted.  As we will see, in all cases, it pretty much comes down to "How much room on the disk will a bit take?"

Optical Media
Optical media must deal with the limit of track width and pit size.  If the tracks are put closer together, the stepper must must be more precise so it can line up exactly with the track.  If the pits are made smaller so more data can fit in given linear distance, then a higher frequency (shorter wavelength) laser must be used to read (and write) to the CD.

MO Media
MO media face some of the same problems. Bits can be placed closer together, but the laser to heat the area of the disc must be able to focus on a smaller area, and the read heads must focus more tightly so the correct data is read.

Hard Drives
Hard drives face limitations of their own. Mainly having to do with data density, and the effects of having too much data in too little of a space.  Hard drives face a limit imposed upon them by the Super Paramagnetic Effect, or SPE.  "Simply described, SPE is a physical phenomenon that occurs in data storage when the energy that holds the magnetic spin in the atoms making up a bit (either a 0 or 1) becomes comparable to the ambient thermal energy.  When that happens, bits become subject to random "flipping" between 0's and 1's, corrupting the information they represent." (Scientific American)  Because of SPE, the representation of the bits on the disk can only be so small.  Another limitation is track size.  If you are to add more tracks, they each must be smaller, so you must improve the ability of the recording head to accurately find the tracks, and improve the accuracy of the position sensor and stepper motor.
 

But despite improved technologies, the current storage technologies will one day reach an unsurpassable limit.  In anticipation of that day, there are many more storage technologies in the works.