Why in AGS "maximum number of record returned by the server" is set to default 1000?
What happens if I increase limit to 100000 or 1000000 in 100 services?
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It's a combination of two things really. 1) How much information can your server handle sending at a given time. 2) How much information can your client handle displaying.
I can't answer "why" 1000. A good a guess as any, 1000 individual features drawn on a webmap would really tax the web browser and performance would suffer (a few years back). You can make the argument now that browsers can handle 1000+.
But to use your example, do the quick math. Say you had 100 services. Each service could return 100,000 features. Each feature has 10 attributes. Then make a max request for each service all at the same time. Will the Server/hardware handle that? Will your web server be able to transfer that much data? Is your internet connection fast enough to handle it?
I'd call 1000 a "protective" number. Increase it to what makes sense in your environment as long as you understand the limits of both your Server and Client.
From ESRI Help:
Maximum number of records returned by the server: Clients, such as the ArcGIS web APIs, can perform query operations to return specific information, or records, from a map service. This property specifies how many records can be returned by the server to a client for any given query operation. Specifying a large number of records to be returned by the server can slow the performance of client applications consuming your map service, such as web browsers, and your GIS server.
You can change it if you want, but be prepared for a decrease in performance. Going a little above 1,000 will probably not change things too much for you but if you increase to 100,000 or 1,000,000 I would suspect that would be far too high for best practices.