It is certainly fair. eBay even says so right in their glossary that defines what a snipe is: http://pages.ebay.com/help/basics/g-sniping.html
It all boils down to the fact that the highest bid wins. If they are worried about being sniped then they either ought to snipe themselves or bid their highest bid. They're just ticked because they tried to enter a lower bid and someone else came along and won the item.