I have no standing (as I have never participated in a Net54 auction), but I see the two flaws as this:
(1) as many have stated, there will likely be scenarios where bidders will feel the bids were artificially raised to come in just under the original bidder's max bid; or
(2) the max bid could have chilling effect on bidding, resulting in seller getting less than the card is worth. For instance, let's say you have a card that routinely sells for $100 in similar condition on Ebay. Seller starts it at $1, and after a few replies, the bidding is up to $45. Next guy posts a max bid of $500. What is the motivation for anyone to bid $50, much less $100? And, if someone does bid $120 (knowing they have no chance of winning), the $500 bidder might harbor some resentment that his bid was raised by a guy that bid knowing full well he was not going to be in the running for the card.
While some auctions will likely go smoothly, I think there will be enough headaches from the problem auctions to make you wish you had not implemented the policy.
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