I need to run an optical cable approximately 20-25 feet, and I'm finding that the longest length offered seems to be 12 feet. Is there a reason for this? Does anyone know of somewhere I can get an optical cable that length or is that a bad thing?
http://www.core-sound.com/toslink-cables.html
a 10 meter length for 30 bucks...pretty inexpensive...long lengths just aren't that common for most mainstream places to stock them so many people couple 2 cables together...should work for you.
To answer your original question, there is no length maximum for toslink cables. In theory, you could easily run a good toslink cable 1000', or more. However, finding one for sale would be another story.