Your car's power steering system is one of the least noticeable, but most powerful systems it has. The average power steering pump can run at 1,000 to 1,500 psi of pressure on the high side -- more than 10 times the amount of pressure in your engine's cylinders, more even than your brakes. That kind of pressurized fluid needs some room to grow, which is why you have that air gap in your fluid reservoir.
Power Steering Fluid
Back in the earliest days of power steering fluid systems, it wasn't uncommon for reservoirs to run completely sealed and pressurized at all times. The problem with sealed systems, though, was that the heated fluid pressurized the reservoir, causing the pump to work less effectively. Overfilling could also cause the system pressure to back up, potentially blowing seals in the rack. Modern power steering systems generally have some kind of provision to vent excess pressure, and the pump contains a check valve to keep the reservoir from excessively pressurizing. It's never a good idea to overfill your power steering pump reservoir; if you find it's overfilled, you should use a syringe or turkey baster to remove the excess. But if it is slightly overfilled, the system shouldn't self-destruct before you have a chance to remove the excess.