In reality, people don't always think of things in the same way. Some may be comfortable and satisfied with their max bid being outbid because they truly wouldn't have paid one dollar more for that item. For others, losing by that dollar would be extremely disappointing even if they thought they had set their bid at their absolute maximum.
We never expected that this feature would suit everyone nor be applicable in every snipe, but we have heard from those who have used it and they liked the result of winning an item they would have lost otherwise.
Whether they "should have" bid in a way that others would have found more suitable is not really important. What is important to us is to make it easy for people to win the items they want.