The best practice for email is to create an email no wider than 600px – 700px. Most email’s are conservatively created to the 600px width best practice standard.
However to explain in more detail: Outlook has a preview pane on the right hand side of the application which previews the selected email in your inbox, this on the screen leaves roughly 700px+ in width to display the emails full width. To avoid the email being truncated on smaller screens and the user having to scroll both vertically and horizontally to read/view the email in the preview pane the width is limited to 600px wide to ensure all users can view the email comfortably with only vertical scrolling required.
This is important as most users tend to read the email in the preview pane rather than opening the email in full. If they have to scroll horizontally as well as vertically most users give up reading the email.
Some designers are experimenting with wider emails as screen sizes increase and this undoubtedly is the kind of email you are coming across, either that or an email crafted by someone who is ignorant of the practical limitations of Microsoft Outlook. However the downside is these wide email aren’t comfortably view-able on smaller screens in Outlook. While I appreciate the width limit is aggravating, believe me it’s as frustrating for Email Developers/Designers, it really is best practice, even now, to ensure all users can comfortably read the email when previewed.
You could move to a larger width wider than 700-800px wide, however I can guarantee that a segment of recipients would find the experience very frustrating when viewing the email in Microsoft Outlook on, for example, a 13inch or even 15inch laptop.
Because Outlook for desktop does not support variable width or fluid width, only a fixed width, there is nothing we can do about this. The limitation is directly a result of the limitations and shortcomings of Microsoft Outlook. If Outlook supported variable/fluid widths we could indeed implement an email that had a max width wider than 600-700px but would then reduce in width dynamically to fit the width of the device/viewport it is viewed on. At the moment Outlook is the biggest Email client vendor and they simply do not support the feature.
While there is no technical reasons why an email couldn’t be larger than 600px (bar perhaps the difficulty of retroactively changing that paradigm in the Drag and Drop editor), there is nothing code wise that prevents it, there are good arguments for not doing so. A large segment of your users would be significantly impacted if you did.