$250 for each card. This limit is bit low.
That sort of limit is imposed by authorities, hence he simply cannot legally issue a non-KYC card with higher limits.
I've seen it before at Wirex; at some point they've offering such cards and the lifetime total amount for the card was this low; and they were asking for some not-so-nice fee to issue the card (plastic too, I think); and their overall fees added up made those cards not really appealing. Virtual-only should be cheaper from start and that's already a plus.
I would say that anyone who gets a non-refundable like that, could also get a regular card, why not? But, if KYC is the problem, they could keep on buying more of those to remove the problem. The thing is, if you want to buy something that is more expensive than 250 bucks, what do you do? I mean the limit is there, so you can't use it to buy anything that is a bit more expensive.
The type of money those places are making is not as high as you might imagine. The costs of running a business like this, and the costs of each transaction come with a price for them as well, so when you are charging something, you are not charging just for profits, you are also paying for something as a business as well. Hence those rates are not high just so they can profit, they have costs too.