It basically boils down to MySQL performance -- whenever Centova Cast wants to select a new track to play, it needs to query MySQL for the past x hours of tracks that have been played on your station in order to avoid repeating them. The greater the value of x, the greater the load on your MySQL server, and thus the longer the query takes to complete (which can lead to buffer underruns on the stream).
The number of other stations on the server has a direct impact on this, however, because their tracks are intermingled in the track data that MySQL needs to sort though. If yours is the only station on your server, then you can crank this number up substantially higher without any adverse impact.