Why doesn't the Windows command prompt window maximize to the full screen size?

By default, each line of the command prompt's buffer is only 80 characters wide. If a program produces an output line of more than 80 characters, it is split into multiple lines of the buffer, so there's no point to having a command prompt window more than 80 characters wide.

You can change the size of the buffer on XP by going to the system menu > Properties > Layout tab > Screen Buffer Size. I usually leave mine set at 500x999 because I hate the default line wrapping (I prefer scrolling). A side effect of this is that you can now maximize the window to the full screen size.

You can get around this by wrapping cmd.exe within Console2.

The reason is that the command prompt is owned by a specific subsystem (csrss.exe) in the windows architecture which is different from the normal Windows subsystem (win32k.sys). Because of this, command prompt windows behave differently then normal windows. You'll note that amongst other annoying behavior, that setting properties for a prompt will only apply to prompts launched via whatever method that particular prompt was launched with.

Why this is, I have no earthly idea.

In Windows 10, Alt+Enter makes the command prompt go full-screen.