If your assumptions are not realistic the rest is not either.
What if you take a more realistic assumption and for example say that the whale has double the stack of the house?
What if you consider the bankroll ruined when it's ruined?
How high is the risk for ruin then?
You can't consider it's "ruined when it's ruined". If the bankroll got down to 5 BTC then the max bet would be 1% of that = 0.05 BTC. It never goes to 0, but when it drops low enough the site is out of business. A whale with double the stack as house is almost the same as whale with infinite stack.
What you guys don't quite seem to understand: A 1% max bet is INSANE for the house. You just suffered a 25% drawdown. With a 1% max bet that is going to happen often at these bankroll levels.
You are right, but even if you consider it ruined when only say 1000 btc is left, chances are negligible for that to happen.
Ok, bankruns may get you there quicker but bankruns are avoided by assuring investors that the investment continues to make sense. That would be the job of dooglus, which he failed miserably to perform during the whale episodes (pulling his own investment, remaining quiet after a whale win, accusing whale of cheating, giving irrational explanations why whale is exception, ... ).
So now the idea is to let investors choose their own maxbet. If executed there will be a high max bet again, and a whale doing the same sooner or later. Will doog believe in his system then? Or will he bail out again? And how, by changing the rules yet again screwing all previous investors? Or by forgetting to assure investors and let a bankrun happen?