I was surprised by the fact that there is a limit to the maximum font size you can set in Flash. Yes, there is a limit and the magic number is 127 px. Collin Moock says, ‘The limitation is based on historical requirements placed on Flash Player by the operating system’ …
He mentions about a solution in his blog post here, which is really a work around, and it may not work well for you in all the situations. It basically to resize the text field(scaled it proportionally).
Or read about font rendering using the FP 10 Drawing API here in Polygonal Lab (AS3 Data structures fame). There should not be any limitation to font size because it uses the drawing API and so vector shapes. But, obviously, it will not be a text field.