Most CD-R/RW designs have topped out at 700MB, but some mnufacturers, such as TDK have created high-capacity 800MB CD-Rs that are compatible with standard CD-R burners.
The problem with trying to fit more data onto the same size disc isn't down to disc technology, but rather the laser technology used in CD-R/W drives. It emits a class 1 laser at a certain wavelength, which means the pits on the disc can be spaced (when recording) a certain distance apart (usually measured in fractions of nanometres). Newer technology like DVD, Blu-Ray, HD-DVD and Ultra-Violet Discs use different types of lasers that either have a slighty shorter wavelength (DVD) or significantly shorter wavelengths (Blu-Ray, Ultra-Violet).
This means that they can pack significantly more pits onto a single disc when recording, and have the even-more-than-pinpoint-accuracy required to detect millions of those pits every second when reading those kinds of discs. So, in fact, massive strides have been made in this aspect of technology, but there's only a certain amount you can do with the CD-R/W type lasers.