Basically, what is happening is the following when your client boots
It reads the elements.data and builds a in-memory dictionary for the game engine to utilize to display item tags when they get dropped on the ground.
Now, according to the server GS most id's, if not all are int32's. However, the in-memory dictionary uses a ushort.
(For those unfamiliar with dictionaries, they are used to quickly lookup key=>value pairs. Its basically an in-memory datatable with a index on the primary key)
For those familiar with C# etc, think of it as a Dictionary<TKey, TValue> where TKey = ushort, TValue = string
We can assume that if PW gets 2 or 3 more expansions, Wan2mei will change it to a int instead of a ushort.
However, thats for them to decide and to fix.
Long story short, we are talking about an actual engine limitation, rather than a bug that has to do with data files. Which means we can do absolutely nothing about it.