Current P2P systems employ tit-for-tat strategies, where peers only upload when they are simultaneously downloading, to avoid free riding. We derive optimal tit-for-tat strategies and obtain theoretical bounds on the performance of any P2P network employing such strategies. These are fundamental limitations that stem from peers unwillingness to cooperate without getting something in return. We show that the number of cooperating peers in a tit-for-tat strategy can, at best, grow linearly in time, as opposed to exponentially for a fully cooperative strategy. However, tit-for-tat strategies are fairer than a fully cooperative strategy. Our results show that there exists a seed capacity threshold for tit-for-tat strategies. Increasing seed capacity beyond this threshold brings significantly reduced marginal gains.