With a 240 kit, you end up with a 500-size piston, which is MUCH heavier than the stock piston. That limits how fast the engine can rev up, as well as limiting how high the engine can rev.
No way! This is just not true. The 240 kit uses a 72 mm piston, exactly the same size as a current KTM300, which is almost square at 72x73. The bigger piston will be heavier, yes, but it's not MUCH heavier, especially seeing as it's an aftermarket item (usually lighter).
Offsetting the greater weight is all that extra gas pressure -- 20% more potential bang accelerating the slug up to speed. In fact, everything else being equal, the engine will rev up faster than the stocker because you have bigger explosions acting upon flywheels, etc designed for a smaller engine.
As for limiting the engine speed, I don't think so. I'll bet that your revs are limited in practice much more by the pipe design, carb size, and other things. The main penalty on revs comes with an increase in the stroke, not the bore. The 240 kit does not increase the stroke and thus the mean piston speed. The extra inertial loading of the wider piston is nothing compared to that produced by a longer stroke.
My 240 revs out beautifully, with great overrev too. I'm sure that most of the increase would probably have come in the low and midrange, but the top is also very impressive. It runs a 180 main jet, which gives some indication of how much extra power it's making up top.
I wish I could compare it to a similarly set up bike without the big bore. I think it would smoke it everywhere. Even so, if I hadn't bought the bike with the kit installed, I doubt I would go for such a radical modification. It really is a bit crazy, and I don't know if I'd recommend it on principle.
Also, remember that the 225 is a straight bore job, whereas the 240 uses a new sleeve with plenty of meat. Boring out a stock sleeve will leave you with thinner iron than the designers intended. Choose your poison.
Craig.