The current theory of alternating-current electro-osmosis (ACEO) is unable to explain the experimentally observed flow reversal of planar ACEO pumps at high frequency (above the peak, typically 10–100 kHz), low salt concentration (1–1000 μM), and moderate voltage (2–6 V), even taking into account Faradaic surface reactions, nonlinear double-layer capacitance, and bulk electrothermal flows. We attribute this failure to the breakdown of the classical Poisson-Boltzmann model of the diffuse double layer, which assumes a dilute solution of pointlike ions. In spite of low bulk salt concentration, the large voltage induced across the double layer leads to crowding of the ions and a related decrease in surface capacitance. Using several mean-field models for finite-sized ions, we show that steric effects generally lead to high-frequency flow reversal of ACEO pumps, similar to experiments. For quantitative agreement, however, an unrealistically large effective ion size (several nanometers) must be used, which we attribute to neglected correlation effects.