The limitation is physics and not the conditions of the lines.
Power is shipped at very high voltage and low current to reduce the losses due to resistance. Why this is so is explained in this link:
http://www.bsharp.org/physics/stuff/xmission.htmlThe power from high voltage long range transmission lines is stepped down using transformers at power substations, which is possible because 1) Thomas Edison didn't get his way and create a direct current power grid, 2) Telsa invented, and Westinghouse improved and commercialized the transformer.
In the United States, power is shipped from substations to localities at 220 volts and is stepped down one more time to 110 Volts, just before entering a home, using those small transformers that one sees hanging on power poles every third or fourth house.
Even without physics considerations, if one wanted to raise efficiency merely by raising the voltage, when one considers the possibility of replacing these systems, the cost in infrastructure is mind boggling.
The environmental cost would also be mind-boggling. One of the motivations for inventing PCB's (polychlorinated biphenyls) was to provide dielectric material for transformers. PCBs are excellent for these purposes because they are extremely stable (hence their environmental persistence), their high thermal conductivity (allowing for efficient cooling) and their high dielectric constant (the conduct very little electricity and thus don't short circuit.) Although PCB's are no longer manufactured and replacement materials have been developed, there are still huge numbers of "grandfathered" transformers out there containing them, transformers that operate perfectly well and may almost be considered "immortal" in the sense that - having no moving parts - they are expected to have very, very long life times.
If these transformers were replaced, one would have to destroy the PCBs they contain. The fact that there is very little infrastructure to accomplish this is just one part of the problem. The other is technological: There is only one known means of destroying PCB's (other than intensive radiation) and that is supercritical water oxidation. This process is very energy intensive, and thus it is easy to imagine circumstances in which any energy gained by increased voltage would be offset by the energetic losses in destroying materials old transformers and building new ones.
One could imagine, of course, placing additional step down transformers in the line and simply increasing the voltage in the power lines, but all transformers, even the best ones, are inefficient and lose energy to heat. Thus again, the increased transmission efficiency might not be balanced by overall system efficiency, especially on a cost benefit analysis.
Finally, the biggest restriction on increasing the voltage and line efficiency is that all materials have a breakdown voltage, which is the voltage at which even insulators ionize and become conductors. This is what lightening is, air exceeding it's breakdown voltage. Typically, for air the breakdown voltage, which is a function of humidity, is in the hundreds of thousands volts range. Transmission lines that exceeded this voltage would simply short circuit when exposed to air. All of the insulators associated with transmission lines have breakdown voltages as well and this is why there are additional limitations on power transmission efficiency via using higher and higher voltages.
Researchers have considered that there is only one way to overcome the physical limitations on power transmission over distances, which is to make superconducting transmission lines, wherein the resistance is zero. However, all known superconducting materials must be cooled to very low temperatures: For most metals, these temperatures, are colder than liquid hydrogen or and in some cases, liquid helium. These cooling liquids themselves require huge energy inputs to produce and maintain. Some superconductors exist that are superconducting above the temperature of liquid nitrogen which would make them somewhat more economically acceptable, at least in respect to the energy cost of producing the temperatures. These high transition temperature superconducting materials however are not metals, they are ceramics, and often contain oxidized forms of somewhat exotic - and difficult to separate - elements like the lanthanide metals (and/or the related element yttrium). Being ceramics they are not really usable in industrial circumstances: They are brittle, cannot be drawn into wires, are very expensive, and can only carry very low current densities before transitioning back to insulators.