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This feels like an arbitrary restriction (obvious sequences have been replaced with ‘...’ to save space in this report):
>>> zip([0], [1], [2], ..., [1999])
 File "<stdin>", line 1
SyntaxError: more than 255 arguments
especially when this works:
>>> zip(*[[0], [1], [2], ..., [1999]])
[(0, 1, 2, ..., 1999)]
Apparently that limit bites some people:
https://docs.djangoproject.com/en/1.3/topics/http/urls/#module-django.conf.urls.defaults
The bytecode format doesn’t support directly calling a function with more than 255 arguments. But, it should still be pretty easy to compile such function calls by desugaring
 f(arg0, ..., arg999, k0=v0, ..., k999=v999)
into
 f(*(arg0, ..., arg999), **{'k0': 'v0', ..., 'k999': 'v999'})