The "drop" range is quite simple.
The lower you go, the less suspension travel you have left. This means you need a higher spring rate to stop the car bottoming out and smashing the bump stops continuously. Given coilovers come with one fixed spring (and are stupidly designed NOT to take standard coilover springs, so you cant even change them!), the manufacturer has to make a compromise. If they say you can run "-90mm" or whatever other stupidly low figure you might dream up, then they need to equip it with springs rated high enough to deal with the fact your car now only has about 1 inch of travel, and as such it ends up rock hard, regardless of the height you want.
If they provide a more modest range, they can provide a much more sensible spring rate which makes them actually usable.
Going too low, ruins the handling, because it stops the suspension being able to do what its designed for, ie keeping the wheels on the road. It might feel like its "on rails" due to a lack of bodyroll, but actual mechanical grip is very likely less than it would be with a correctly setup car at a modest ride height. This is because instead of absorbing bumps the whole system is so stiff the car essentially skips and bounces over them instead.
The upsurge of coilovers has to be about the worst thing thats happened to aftermarket car suspension tuning in recent years.