It displays the 45 most used tags. That is how it was designed. That cannot be changed. I have two clients with over 500 tag. Would you really want a list of 500 tags in the sidebar? Not one would bother to spend the time looking through them. The web has no patience.
The Tag Cloud widget will display 45 of the most frequently used Tags on your blog. All widget data is cached and may take some time to update. If the widget does not update in a few housr then please contact Staff a report this to them.