Some limitations to grappling arts are:
Multiple Attackers. Since ground fighting requires maximal body entanglement, it is virtually impossible to fight multiple attackers. When defending against multiple attackers, your only hope is powerful punches and kicks against deadly targets.
Edged Weapons. When applying a grappling lock, it is extremely difficult to defend against knives and other edged weapons.
Onlooker Intervention. People are champions of the underdog. Nobody likes to see a person mounted and pummeled with vicious blows or being held in pain in a lock, so someone may decide to come to the aid of the person in pain. If you are locked up on the ground with your attacker and spectators decide to intervene, you are in big trouble.
Psychoactive Drugs. If your adversary is high on psychoactive drugs, he will have freakish strength and often be immune to pain. Do you want to be on the ground with a large man on such powerful drugs?
Environment. When ground fighting, the environment and immediate surroundings can harm you (heavy traffic, rocks, broken glass, a street curb, etc.).
Weapon Retention. If you are a law enforcement officer or security guard, there is a very strong possibility that your attacker may pull your holstered sidearm and shoot you while you are ground fighting with him.
Biting and Gouging. Many submission techniques can be negated with biting, gouging, and various other maiming techniques.