[brownbat]

It's possible, but this explanation still implies they're storing the passwords, not the hashes.

[winkeltripel]

Think more along the lines of "they once had a mainframe in their infrastructure which stored passwords instead of hashes, which caused their requirements to limit the length of passwords to 20 characters, even if that system is no longer in use, or now uses hashes."

[Thorrez]

Sure, but that means that currently there's no reason to have the limit, except that they don't want to invest any effort to change it.