Stretched lobes suffer from reduced circulation by default, but if you are careful to stay healthy there are no real limits to the stretching — I have seen lobes with over 16" of stretched tissue per ear, and this is of course far longer than most people will ever stretch.
Circulation can be compromised by, among other things, accelerated stretching compressing the ear tissue, tears, excess scar tissue from overstretching, botched scalpelling jobs, and so on.
Aggressive stretching coupled with minor problems can lead to swelling; if the lobe is already distressed then keeping excessively tight jewelry in can cinch off blood vessels enough to strangle the life out of the lobe. If you notice this happening (hopefully long before it gets to the point shown on the right), my advice would be to take out the large jewelry immediately and downsize it to 2/3 of its size or smaller. Massages and so on may also help.
The easiest way to avoid these sorts of problems is to stretch slowly and listen to your body.
Failing to deal with this relatively quickly can result in the loss of your earlobe or worse.