Gambling sites do not directly tell anyone that you are wasting time gambling on my site. But they arrange their gambling games in such a way that draws a gambler there again and again. Its name is addiction. If it is excessive then it takes a terrible form. So controlling yourself from gambling is a difficult task which is not possible for everyone. And he who can do this is the real hero and a smart guy
I think it's a bit about doing something that raises some questions more than its about the wagering amount. I have seen people who were asked KYC for $100 but I have seen people who were not asked for over 5k, all because of what they did and how they gambled.
So, it is all about suspicious activity and nothing more, yes there is obviously an easier time if you could just see those suspicious activities on a big account with a lot of funds, and who would abuse any system for just 20 bucks for example, that much is true. However, as far as I know, it has been done before and people with under 300-400 dollars were asked for KYC because of some rule breaking stuff they did.