I have no idea why but mkfs.ext3 defaults to a patheticlly small blocksize of 1024 bytes/1KB (kilobyte). That means the maximum filesize is ONLY 16GB! With 2KB/2048 bytes you get a 256 GB maximum filesize, and with 4KB/4096 bytes you get 2TB!
I finally noticed/paid attention to this after realizing that with rsync and scp that no file larger than 17GB could be transferred. I then realized it must be a file size limit on the partition.
Here is what tune2fs tol........