One feature of floppy disks is that the recording technology and the format is independent from the physical medium, the limitations are mostly imposed by the disk drive, the encoding and the file system, not the medium itself.
Well, this "feature" creates significant compatibility issues as all the vendors created their own proprietary formats, sometimes with patents. As a result, together with the economics of scale, often, the standard format is not the best design, a simpler design that serves as the lowest common denominator.
On the other hand, due to this feature, it was already possible to store 1,760 KB of data on a 3-1/2 inch HD floppy on a 1986 Amiga. And in 2000, it was possible to store 32 MiB of data on a standard 1.44 MB floppy disk, by using a SuperDisk LS-240 drive (although random write is sacrificed, the entire floppy must be rewritten if a change is needed, like CD-RWs).
I believe the advancements in magnetic recording technology in the past 20 years allows one to achieve even higher capacity on a standard floppy, and it can be as cheap as early floppy drives if mass produced, only that it doesn't make sense to do so.