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Hopefully steam will remove this limit or at least will make it clearer in the future that you can only have 7 different steam libraries.
I have the same issue. Steam is basically saying "Don't buy any more games from us, even though you have TERABYTES of storage on additional drives, because we don't want you having more than 8 libraries." Very clever Steam. Way to cut your own profit.
Why do you need more than 8 drives? Who has that many drives and doesn't have most of them in raid?
No, it's not that at all.
If you're having that many drives and need them adding you are WAY beyond the normal, so why shoudl Steam have a facility for that? You have no idea if there's stability issues at that level either.
Steam also requires no more than 90% usage of hard drive space wherever it's installed. Many users who use a few drives tend to run them full, and wonder why things will no longer download or in the wrong place, or other weird stuff. Likewise if you haven't defragged those drives lately too.
Plus bear in mind that any game you're downloading needs THREE TIMES the final space to work from. So it doesn't even matter how much space you've got left, if you haven't done these things, you will have issues.