Withdrawal limits restrict how much players can withdraw in a certain period of time (e.g., one day, one week or one month).
Withdrawal limits can create scenarios where a big win is paid out to a player in small tranches over a period of time. Sometimes, low withdrawal limits (or slower withdrawals) are not in force just because the casinos want to have them, but because of external factors such as legislation, available payment methods, etc.
Casinos generally use withdrawal limits to protect their cashflow, i.e., to avoid having to pay out a big win at once and to avoid causing issues to the company's finances.
Players generally want to withdraw their winnings all at once, regardless of their size. Deposits are often unlimited and instant, so players don't understand why they should wait for their winnings to be paid out to them.
Ideally, there should be no withdrawal limits, but we know that they will not go away. In a fair casino, players should be able to withdraw their winnings, even if big, within a reasonable period of time. We should be aware however, that withdrawal limits should not apply to progressive jackpot winnings, as these are not paid out by the casino.