Melatonin is an exogenous hormone that you are introducing into your body. Think about the HPTA feedback loop associated with steroid use. There very well might be similar feedback loops (and resulting drops in natural melatonin production) from continuous ingestion of high doses of melatonin.
Victor Herbert, M.D., J.D., of the Mt. Sinai School of Medicine, cites studies from Massachusetts Institute of Technology that say melatonin pills sold as supplements contain three to 10 times the amount needed to produce the desirable physiologic nocturnal blood melatonin level for enhancement of nighttime rest. Dosages are designed to raise melatonin levels for several hours to enhance quality of sleep, but some studies suggest that smaller doses are just as effective at improving sleep quality.[38] High dose melatonin can even be counterproductive: Lewy & al[39] provide support to the "idea that too much melatonin may spill over onto the wrong zone of the melatonin phase-response curve." In their study, 0.5 mg of melatonin was effective while 20 mg wasn't.
#38 ^ Zhdanova I, Wurtman R, Regan M, Taylor J, Shi J, Leclair O (2001). "Melatonin treatment for age-related insomnia.". J Clin Endocrinol Metab 86 (10): 4727 – 30. PMID 11600532.
#39 ^ Lewy AJ, Emens JS, Sack RL, Hasler BP, Bernert RA (2002). "Low, but not high, doses of melatonin entrained a free-running blind person with a long circadian period.". Chronobiol Int. 19 (3): 649-58. PMID 12069043.