Am I correct in stating the reason we do not have bigger blocks is because the miners haven't configured their limits above a certain threshold in their clients?
About 4 hours ago there were some 82,000 transactions pending but it has since dropped way off. Is this because of lack of funding of the stress testing programs people have built?
there is no centralized funding, users spend what they wish on testing, which is cheap: for USD$2 you can send about 1000 txns, or BTC's daily average.
not really. it's not so much about the limits (e.g. BU client has no explicit limit), as about scaling the software in general. we are discovering the bottlenecks.