That's really DEFLATE, the sliding window of standard deflate is 32KB. Both compression and decompression have some overhead (compression more so as you might want to have index tables and whatnot to make finding matcher faster) but even with the worst possible intention there's only so much overhead you can add.
That's probably a misunderstanding or misremembering: the DEFLATE format can only encode distances of 32K (the proprietary DEFLATE64 allows 64K distances but not everything supports it).