Summary: Immersion chillers have diminishing returns on length. The first foot of tube does more work than any other foot of tube. The last foot does the least.
An immersion chiller is a specific example of a device called a heat exchanger. As an engineer I took classes in heat transfer and heat exchanger design. Although I can explain exactly why counterflow heat exchangers are far more efficient than immersion chillers, I have yet to build one of my own.
The immersion chiller transfers heat from your wort to the water flowing through it. The image shows cold water entering an immersion chiller at the top. As it flows through the tubes it heats up and hot water leaves from the bottom.
I stole the image from someone who did way too many pointless simulations about beer brewing. He doesn't explain exactly how they work, and I think he got a few details wrong. Because the rate of heat transfer between the wort and the water is proportional to the difference in temperature between them, the cold water at the top of the chiller is transferring heat more quickly than the hot water at the bottom. Therefore the difference between water and wort temperature follows a exponential decay as it travels through the chiller. The closer the temperatures are when the water exits the chiller, the more efficient your chiller is.
The graph shows an example of what this might look like for a hypothetical 100 foot chiller. The cold water enters at 60 degrees and heats up to the temperature of the boiling wort as it travels through the chiller. The form of the equation is correct, but I basically just made up numbers as examples.
The biggest change in temperature is in the first 25 feet of the chiller. The second 25 feet is useful, but not as much as the first 25. The last 50 feet are not particularly useful. I have a 25 foot immersion chiller. My chiller water exits the chiller significantly cooler than the wort, but hot enough to get the job done. If I had a 50 foot chiller, it would come out slightly cooler than the wort. If I had a hundred foot chiller, I would be wasting my money.
In an immersion chiller length is not the only factor. More water can flow through a larger diameter pipe, but the heat transfertransferred per unit of water is lower. This generally means you cool your wort quicker, but you use more water. Convoluted piping has slightly more resistance to water flow, but considerably better heat transfer. Usually this is a net win. Running a coiled wire inside your tube is a poor mans way of getting the effects of convolution. Stirring your wort continually while the chiller is running can improve your efficiency, but also means you will have more trub in your fermentor.
A counterflow heat exchanger is the most efficient type of exchanger. This quora answer does a pretty good job explaining why. I recently switched to all grain brewing, which requires a full boil, and therefore more cooling power. My next project is to convert the copper tube I call an immersion chiller into a counter flow heat exchanger. When I priced out all of the fittings and tools, I found it would be a little more expensive than buying another 25 feet of copper pipe.