The limit was imposed primarily because of compressibility effect. At higher altitudes air takes on the added and more pronounced effect of compressibility. Operating High lift devices at these altitudes may place the aircraft in a regime where it has not been designed/tested.
Notso Fantastic:
Heres an example for you..
We operate to airfields with elevations in excess of 11,000ft, where runway slope is +3% on landing and -3% on takeoff (unidirectional runway) using Flap 15 as a Normal landing flap. As you can see, elevation, slope limits and Normal landing flaps are not within Boeings prescribed limitations. Boeing provided us with a NOC (No Objection Cert.) to carry out such operations, so off you go..
These fields are located in narrow valleys in an area where the grid MORA is 24000ft. Nav aids only work in close proximity to the airfield. So descent into the valleys are completely visual and where, when and how to commence decent varies depending on cloud coverage. In addition, the valleys appearance varies depending on recent or prevailing environmental conditions. eg snow covered etc. Needless to say, there have been times when the wrong valley was entered. Therefore, prior to entering the valleys, speed is reduced to decrease the turning radius. This often entails selecting flaps in excess of 20000 ft albeit not much higher. I've never experienced any abnormality as far as flight controls are concerned while selecting flaps at this altitude.
Cheers