Updates:
- In June 2017, max capacity for items was increased to 1500.
- In May 2018, max capacity for items was increased to 2000.
Before, it was 1000. As others have also, I fully upgraded mine. Of course, I wouldn't be shocked if a future release allowed for further expansion.
I have included a screenshot of my 1000 each and what the store says about my Storage/Bag being fully upgraded.
