It is a limitation for the current version of PowerApps Preview. In general, PowerApps works with any size data source by delegating operations to the data source. For operations that can't be delegated, PowerApps will give a warning at authoring time and operate on only the first 500 records of the data source.
As PowerApps still is improved, the limitation would be improved in future.
There are two similar threads about this limitation, you can take a look at: