It indeed stops at 127 lives in SMAS and SMBDX.
What I did so far for the original SMB was to change the instruction at $91D9 in the PRG-ROM so that it branches on not equal (BNE) instead of equal (BEQ) (to get Game Over after losing your last life, not when it goes into negative territory at 128 and beyond). I must give due thanks to KingMike at Romhacking.net for that bit of help.
~Ben