Why do graduate student contracts state "RAs shall work no more than 20 hours per week?"
If you are working at a US University, they often do this in order to ensure that you are ineligible for benefits under the family and medical  leave act (fmla).  If you work over 1250 hours they have to provide you with additional benefits, which cost more than they are willing to pay for your labor.

http://www.dol.gov/dol/topic/workhours/fmla.htm