Here, “pale” isn’t the adjective derived from O.Fr. paile, from L. pallidus “pale, pallid”, but the noun that comes from L. palus “stake,” related to pangere “to fix or fasten”.
The Phrase Finder explains that
Catherine the Great created a “Pale of Settlement” in Russia in 1791. This was a western border region of the country in which Jews were allowed to live. The motivation behind this was to restrict trade between Jews and native Russians. Some Jews were allowed to live, as a concession, beyond the pale.
Pales were enforced in various other European countries for similar political reasons, notably in Ireland (The Pale) and in France (the Pale of Calais).
Hence, the expression beyond the pale has come to mean “beyond the limits of what is acceptable”.