I would suggest you contact your ISP and ask them. Many email service providers limit the number of recipients for any given email as a prevention against spam. I'm not aware of any limit coded into Mail, though I can't say it couldn't be a bug.
I send to larger groups than yours, but only some SMTP will permit. Neither the SMTP for Gmail, nor that of my hosted domain accounts will permit the group, but the one provided by my ISP will. Dave is correct that it is not any limit in Mail itself.