The Proclamation didn't so much as set aside a huge chunk of land but put a limit on colonial expansion westwards. The Crown had just received all these new lands filled with Native Americans who were previously used to dealing with the French and had to balance the desires of the parties involved.

What the treaty did was make the lands beyond the Atlantic watershed reserved for Native Americans and forbade Colonists from purchasing land from natives, settling, or surveying Native American land. All land grants and purchases had to be performed by British representatives.

It also stated, with regards to any current settlers:

And, We do further strictly enjoin and require all Persons whatever who have either wilfully or inadvertently seated themselves upon any Lands within the Countries above described, or upon any other Lands which, not having been ceded to or purchased by Us, are still reserved to the said lndians as aforesaid, forthwith to remove themselves from such Settlements."

It was not popular with the Colonists and the Crown would allow for more westward settlements through later treaties with various tribes.

If you wish, you can read the treaty here.