Not true. Before I refined my bidding skills, I lost a number of auctions, regardless of price, by my proxy being surpassed. Maybe $1 increments don't always apply, so the larger the total, the larger the minimum bids are, but your bid still gets chipped away. For example...
Bidder B.......$505.00
Bidder A.......$500.00
Bidder B.......$500.00
Bidder B.......$450.00
Bidder B.......$400.00
Bidder B.......$350.00
Bidder B.......$300.00
Bidder B.......$250.00
Bidder B.......$200.00
Bidder B.......$150.00
Bidder B.......$100.00
Bidder B.......$50.00
Bidder B.......$10.00
Bidder B.......$ 9.00
Bidder B.......$ 8.00
Bidder B.......$ 7.00
Bidder B.......$ 6.00
Bidder B.......$ 5.00
Bidder B.......$ 4.00
Bidder B.......$ 3.00
Bidder B.......$ 2.00
Bidder B.......$ 1.00
The point being, as long as you are a target, your bid is in jeopardy. Here is where the seller loses on this type of deal though and I can fully understand where a seller might hate sniping...
In the example above, the item sells for $505. Now let's say I hold off bidding and decide to snipe. I'll still toss in my $500 bid, but since I didn't have my target out there, let's say the bidding only reaches $50 because bidder B was top bidder after reaching that mark by beating bidder A's proxy of $49. No reason to bid higher, because he wants the best possible deal, so he only bids until he is high bidder. I come in and snipe the item and get it for $51! A bit extreme on the price differences, but I swear to you similar situations go down like that every day!
Not only do I win in the snipe example, but I potentially save $100s (sometimes minimum bidder gives up after driving your proxy way up).
Bidder C.......$51.00
Bidder B.......$50.00
Bidder A.......$49.00
Bidder B.......$ 9.00
Bidder B.......$ 8.00
Bidder B.......$ 7.00
Bidder B.......$ 6.00
Bidder B.......$ 5.00
Bidder B.......$ 4.00
Bidder B.......$ 3.00
Bidder B.......$ 2.00
Bidder B.......$ 1.00