You could say that it was in part because of the Battle of Teutoburg Forest. But it also came down to practicality.

It is claimed that the loss at Teutoburg Forest had a profound impact on Emperor Augustus. According to Suetonius upon hearing the news the Emperor stood banging his head against the wall and repeatedly calling for Varus, the Roman commander in the battle, to give him back his legions. Augustus would take measures to fortify the Rhine-Danube front and Dio later records that the Emperor would advise his successors via his will that they should "be satisfied with their present possessions and under no circumstances to wish to increase the empire to any greater dimensions."

Of course, this advice was ignored as numerous later Emperors attempted to expand the Empire's frontiers, including across the Danube during Trajan's invasion of Dacia.

In the past, some scholars have attempted to frame this as the Romans being fearful of another Teutoburg Forest which would explain their hesitance to advance across the Limes Germanicus. However, as modern scholars such as Peter Heather have pointed out, there were probably very practical reasons for limiting the Empire to the Rhine and Danube river.

Even, today there are numerous examples where the borders between nations, states, towns, etc, have been drawn following a particular river as it is a very clear barrier to distinguish one territory from another. This is especially useful in more ancient times when not everyone would have access to such things as maps. In fact, it is arguable that the Rhine and Danube borders created a much clearer distinction between Roman and foreign territory than Hadrian's Wall, which did not necessarily mark the point where Roman authority and influence ended.

The Romans also recognized the defensive value of such positions. Put simply, it is much easier to defend your territory if the enemy must cross a river to get to you. This is especially true when we consider the extensive military fortifications across the front and the amount of legionaries that could be stationed along the border at times. To give you an example of the scale of forces, during the reign of Nero there where around four legions in Britain, only one in the interior of Gaul and around three in the region of modern day Spain and Portugal. Combined, these do not total the amount of legions on the Rhine Danube front at that same time (around 9 or 10 legions from the coast at Germania Inferior to Thrace). Sure they could have drawn this border further east through some arbitrary fields and forests, but the costs of having to fortify such a huge border without any natural barriers would have been staggering and would have created a strategic detriment for the legions as it would have likely become a much more difficult front to hold.

It is also important to keep in mind that these borders also served the purpose of funneling trade through checkpoints so that they could be taxed. While Hadrian's Wall seems to be a better example of this as opposed to the more military purpose of the Limes on the Rhine and Danube, this is still a factor.

The point I am getting at is that the Romans already had an ideal border. I don't think that the commanders doubted their ability to expand the frontier so much as they doubted the value of such acquisitions or their ability to hold them. The invasion of Dacia was largely in response to raids being conducted across the Danube. The invasion of Mesopotamia during the reign of Trajan was in response to the serious threat posed by the Parthians. Even though the campaign was successful and Parthia suffered a great defeat, Trajan's successor Hadrian quickly abandoned these provinces, likely because he realized they were incredibly difficult to hold.

Of course this frontier was not perfect, particularly when it froze over, but they were definitely a logical choice.

Hope this helps.

Sources: Suetonius, The Lives of 12 Caesars. Dio, Roman History. Heather, The Fall of the Roman Empire: A New History of Rome and the Barbarians. Tacitius, Annals of Imperial Rome. Dando-Collins, Legions of Rome.