I think there may be a limit of joypads in Windows itself -- this command for obtaining joypad information says you can return details for joypads with IDs from 0 to 15:
http://msdn.microsoft.com/library/default.asp?url=/library/en-us/multimed/htm/_win32_joygetdevcaps.asp
This Windows 95-era DirectInput article states that it only supports 16 joypads. May possibly have changed since then, but I can't find any other references to this:
http://msdn.microsoft.com/archive/default.asp?url=/archive/en-us/dnargame/html/msdn_sidewind.asp
http://msdn.microsoft.com/library/default.asp?url=/library/en-us/multimed/htm/_win32_joygetdevcaps.asp
This Windows 95-era DirectInput article states that it only supports 16 joypads. May possibly have changed since then, but I can't find any other references to this:
http://msdn.microsoft.com/archive/default.asp?url=/archive/en-us/dnargame/html/msdn_sidewind.asp