Problem downloading large app using iPad 2
In my experience, when this happens it's usually down to the fact that the download process failed (for whatever reason) and iOS will not allow you to recommence the download or try starting it again from scratch. It's not so much to do with a software imposed download limitation. 

There's only a limit over 3G (20MB) and a general limit on app sizes (2GB).

The only thing I can suggest is trying to delete the app from the home screen and restarting the download (although I'm doubtful this will work).

Otherwise, you will have to connect to iTunes and install as it suggests. For large apps, I tend to do this due to problems like you have experienced and because it's usually quicker!