With raytracing having a far render distance is actually fairly cheap and simple compared to polygonal worlds (good looking LOD is hard).
Some reasons why we don't have a super far render distance, in order of importance:
The biggest is GPU memory. The octree that holds the world gets gigantic at large sizes. We'd have to swap parts out as the camera moves. We can do that but haven't gotten there.
Noise: raytracing looks incredibly noisy if you simply cast rays far into small geometry. Hence we even have LOD for blocks, even though they're not needed for efficiency, they're needed for visual stability.
If you're unlucky and a ray has a lot of near misses with geometry, it does more work than other rays and it causes GPU performance degradation. It's rare but to raytrace far you have to optimize for a certain amount of ray steps, we actually put a bound on this.
We find having fog gives some visual unity and sense of scale. With far away fog, the world looks VERY busy visually.
Is there any way to have something like a distance blur? e.g. as rays travel further you reduce the number, subsample then apply a gaussian(or algo of choice) blur across those that return, increasing in intensity as the rays angle gets coarser?
It'd be really neat to have some way of enabling really long-distance raytraced voxels so you can make planet-scale worlds look good, but as far as I'm aware noone's really nailed the technical implementation yet. A few companies and engines seem to have come up with pieces of what might end up being a final puzzle, but not seen anything close to a complete solution yet.