Sorry for the delays in responding here, I just returned from our trip to Macau/Hong Kong (Macau gaming industry is now starting to learn about BTC )

We've increased the max bet from .001 to .01 for two reasons:

1) Due to the fee of .0005, players who are betting .01 are going to lose no matter what. It is not wise to bet .001 when fees are paid.
2) There was a player recently sending tons of .001 transactions to SatoshiDice. This caused most of the delays players have experienced over the past few days. Whether it was malicious or not, it seemed smarter to just remove that tiny bet option. Any "strategy" that used small bets like that is a bad strategy unless fees were not being paid, and fees should be paid by anyone sending so many transactions.