This one just bit me without a clear answer.

I was backing up thousands of photos from my last trip to Google photos using the Picasa API (yes! Picasa is still alive behind Google photos).

At some point I started getting the following error:

Photo limit reached.

I checked my space and I had plenty of GBs available on my account and could not find a proper answer until I ran on this answer to another question on how many pictures an album can have - A limit of 2000 photos per album.

What happens is that the pictures that you add to Google Photos without indicating an album go to a default album called "Drop box". So after uploading 2000 pictures to no album lead to the Drop box album getting filled causing this error.

The solution, to remove the pictures from that one album manually (for now) and resume uploading.