It doesn't (on this occasion) appear to be a CRT (C RunTime library) problem. Using

#include <stdlib.h>

int main( int argc, char**argv ) {
    int rc = 0;
    printf( "Using '%s'\n as an argument to system()\n", argv[1] );
    rc = system( argv[1] );
    printf( "Command returned: %d\n", rc );
    return 0;
}
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built with msc and calling it with an argument of 256 'A's gives:

P:\test>system AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA.....
Using 'AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA...'
 as an argument to system()
'AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA...AAA'
 is not recognized as an internal or external command, operable progra
+m or batch file.
Command returned: 1
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Increasing the length to 300 'A's

P:\test>system AAAAAAAAAAAAAAAAAAAAAAAAAAA
Using 'AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA...AAA'
 as an argument to system()
The input line is too long.
Command returned: 1
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