From the WebControls documentation itself:
"Each time an update is made to the UI of a TreeView control, for example, whenever a node is expanded or collapsed, additional data is appended to the view state, which maintains a history of state changes in the Web page. This means that each time a view is updated with a large data island, the amount of data appended to the view state history is increased. In ASP.NET, there is a limit in the size of the view state, so the combination of very large tree hierarchies combined with multiple updates may cause performance problems, and in certain cases portions of the history could be lost."