The limits been hit once or twice before where the big pool operators get together in there dark secret room and increase the block size limit I know they increased it to 512kb and assume now we are on 1MB it dosnt matter if they don't all increase it but if they don't then there's a delay for unfunded transaction
The 1MB is a hard limit, while the soft limit was 250KB and has been lifted already.
As DeathAndTaxes mentioned, we can only have 7 tps with 1 MB block size, but indeed we are still far from that.
You can find the average block sizes here. (second graph of https://blockr.io/charts