It is, of course, impossible really to exactly value players, so why be concerned if you overbid on players if it is just by an incremental amount? I think this is particularly true if they have upside or are fairly consistent in their returns.I agree with the notion that you're never going to truly be 100% correct in assessing what a player is worth - whether you're projecting his stats or trying to determine what to pay for that player.
A projection is a determination of what a player might do based on a number of factors: playing time, age, injury risk, etc. Yet projections usually miss the mark, and sometimes they miss by a lot.
The idea behind bid limits is to try and take all of these factors and put them into play. There is some guesswork involved and our biases and preferences come into play when we decide what a player is worth. But a bid limit isn't designed to determine what a player will earn. Rather, it is designed to provide a framework for what you think you should bid on a player in your auction.
I suspect that Gypsy Soul and I are simply looking at bid limits and their application differently. I agree that my $30 player might be someone else's $32 or $28 player. But I like to go into my auction with an idea of what I'm willing to pay for every player who is available at auction. So I'm not looking at it like I'm "overpaying" for Johan Santana if Alex Patton's bid limit is $35 but mine is $37. I'm adding a little value to Santana because he has earned $33 or more each of the last five years and I'm willing to take a slight loss on a pitcher who has been incredibly reliable over that span of time.
The bid limits are also guidelines, not numbers that are etched in stone. During my auction, I reserve the right to not push a player to my bid limit or - in rarer circumstances - to push a player past it.
In the end, though, setting bid limits is a significant part of my strategy and planning. If I've done my job well preparing for my auction, that means that if a player is sitting right on my bid price and the auctioneer is saying, "Going once, going twice," I will generally keep to my bid limits and refuse to go $1 higher. I prefer to build my assumptions into my bid limits and not adjust on the fly. Not only does this keep me disciplined during the auction, but it also gives me a solid handle on how I feel I'm doing during my auction.