Why does the Rosenmund reduction stop at the aldehyde stage?
In general, the Rosenmund reduction isn't actually used very often, mainly since the catalyst is also very good at reducing other functional groups which may be present in the molecule (the catalyst is similar to that used for a Lindlar reduction). 

To quote from Comprehensive Organic Name Reactions and Reagents: 


  [...] the Rosenmund reduction is an unreliable and irreproducible method for organic synthesis, and it is often in competition with other side reactions. For example, alcohols are often the by-products of the Rosenmund reduction.


How the reaction works/why we get an aldehyde

As with many reactions involving catalyst systems in which palladium has been absorbed onto something (the classic one being palladium on carbon/charcoal), the mechanism of the Rosenmund reduction isn't well defined, and indeed there are likely to be different mechanisms operating depending on the quality/specification of the catalyst used. 

One possible pathway has been proposed, and is given below. The critical thing here is that the acyl chloride is first activated by oxidative addition into the acyl chloride – this activation allows the reduction to take place. 



The product of the reaction is often therefore the aldehyde, which should be kinetically inert to further reduction (this has been discussed on chemistry.SE previously, and can be found here), though the alcohol is often obtained in small amounts.