The 25K  limit was set for the "middle class" many years ago. You were deemed sufficient rich at over 100K in income that you could do any extra savings without tax assistance. There is no law prohibiting savings outside RRSPs. Even 25K / yr. over 30+ years at a reasonable rate of return will give you over a million. The problem with recent low interest rates is that even a "balanced" portfolio is not returning as much as expected. 

If you make RRSPs unlimited, you end up with the small business "problem" - those with excess cash will simply hide it away and defer all taxes. Government does want to collect income taxes, and small business owners have managed to defer taxes (except the low SB tax) for years. 

Finally, the SB can specifically set up an individual pension plan for retirement of the owner, but the previous system did not encourage that.