The same behaviour can be observed for example with this code (add WS_VSCROLL to the rich edit controls and try to paste an enormous lot of text into it).
It appears that indeed text controls have a default size how much text can be typed or pasted into them (and wxWidgets apparently tries to increase that internally but doesn't for some reason get the size right and instead increases the max limit in fixed steps?).
Currently I just put this in the text editors constructor, so it would let me at least paste up to around 1000000 characters:
However, since it is a tabbed program and can have many text controls open, is it a good idea to set that kind of max size to any text control the program might have?
//increase text limit to allow larger documents to be pasted
SendMessage((HWND)GetHandle(), EM_EXLIMITTEXT, 0, 1 << 20);