When you snipe an auction, you are supposed to bid the most you are willing to pay for it. Even when you snipe, you are still proxy bidding. The nice thing about sniping is that you know, very quickly, whether you've won or not. Sure, you're not going to win every auction, but you don't want to anyway. There's nothing you can do about the guy who bid way to much in his proxy bid. That's why you go in at the last second and bid what you want to pay. If you're lucky, you'll come in just a few bucks over what the other guy's proxy bid is.
I buy and sell on ebay, and actually, I like the snipers. Just when you think your auction is going to end at $100, it closes and all of a sudden, it's $200 because a LOT of people wait till the last minute to bid.
-shane