The fact that you offered an amount you feel is a fair amount is irrelevant, the seller doesn't want to discount more than £1. It's their item so they can ask what they want for it, the best thing to do here is walk away and find a listing nearer to the price you want to pay.
I rarely set any harsh limits when I enable offers and allow them to come in without restriction, I counter offer if the amount is too low and accept if it's reasonable. Your example here is a seller who likely isn't interested in discounting an item and just puts the offer there as those listings tend to get more attention, it could also be a form of pressure tactic where the buyer exhausts all offers then gives into the full price.
Another point is that some sellers put the best offer with a high minimum to gauge what people are willing to pay upto, when a month passes they'll relist it at the highest average.
The offer limit is obviously not taking sellers like the one you gave an example of into account as it's generally bad practice if you want to sell items fast to put a high minimum offer. The limits are meant are more for those who would apply serious ranges for a minimum offer, not showing the minimum amount is fair enough as most people would just default to that number otherwise.
In cases where the minimum offer is set low against the asking price you could argue why put a number that low if you don't intend to sell for that amount but it's all a game really and sometimes people put ridiculously low offers in to gauge what the seller's best offer can be, the limits just streamline the process to keep it people's offers in check as eBay still need to make money from the percentages. I'm both a buyer and seller so understand how it feels to be on both ends of it, 90% of my listings are sold via offers though it's rare anyone will get to the third!
They could allow sellers to set their own limit but I doubt this will ever happen, the US limit of 5 seems more fair in my opinion but I'm sure they'll adjust that down at some point.
