The envelope that this phrase originated around was not an envelope that we use in written correspondence. It was the mathematical envelope. I read the word 'mathematical' and my brain shut down so you'll have to read about this mathematical envelope here. *grin*
When we say it today, however, we aren't referring to anything math related (thank goodness for me). What we are saying is that someone is pushing the limits or boundaries of what can be or should be done.