Is there a limit to the resolution of images a spy satellite could capture?

I'm interested to know the answer to this. I work with spatial data, and the big satellite provider, Digital Globe, can provide imagery with pixels of around 0.5 m. This is a US government imposed limit, I think.

What is the theoretical limit of the resolution of an image captured from space, either from a spy satellite or that X37. I'm guessing it is limited by atmospheric distortion, but this can be modelled and solved for in post processing, right?