^No, limp mode is not just cruddy mileage.
Here's a decent description:
Your engine management and maybe even your transmission is controlled by the ECU. As you know, all computers crash, all software has bugs, and mechanical equipment fails. As such, many ECU units are fitted with a 'limp home mode'. When it detects that something semi-serious is wrong, it enters the limp mode, which means that the engine won't rev beyond a pre-programmed speed, you can't accelerate very fast, or you may indeed be speed-restricted to 40 mph or similar. The transmission may even stay in one or two gears. Bad? Well, no, not really: The alternative would be to either let you drive at regular speeds, with the danger of letting you trash your car (expensive repair, means happy repair people, but angry driver), or stopping you from going anywhere (expensive recovery and stranded on the side of the road means happy recovery company, but angry driver).