A substantial research effort in recent years was focussed on the development of atmospheric pressure plasma (APP) for technological applications. For some applications such as surface treatment or rapid film removal the technological progress is fast and processes are available, being an alternative for the well established low pressure plasma approaches. For other applications, such as high quality film deposition or anisotropic structuring, the application of APP faces serious difficulties. These problems are discussed from the point of view of fundamental physical limitations. The different type of pressure scaling rules are critically reviewed, leading to the conclusion that APP works not because of scaling, but because of specific physical phenomena, which are significant in the pressure range over 100 Torr but can be disregarded for lower pressures. Special focus will be on the dynamics of the APP discharges and effective life times of species used for driving the APP processes. In this context, the frequency ranges for APP generation are investigated. It is shown, that only very narrow parameter windows and only selected gas mixtures allow the successful processing. Different types of APP discharges will be analyzed from the point of view of the basic physical limitations. Conclusion from this analysis will be the estimation of future trends in technological applications of APP and the definition of realistic process challenges.