There is no logic. Virgin Atlantic has it sorted - you can redeem as many miles as you want, at 0.6p, towards the entire fare including the taxes. Job done.
The BA option is just stupid. It's like 'we want you to redeem your Avios except, erm, we don't really because we'd prefer they just expired and you forgot about them'. You can have a nominal £10 off at a decent rate but heaven help you if even think of paying your taxes with them.
The joke is that BA and Avios are two separate businesses and BA in theory shouldn't give a monkeys how many Avios you use, as long as you're getting the 0.55p per point that Avios Group will pay across.
I can understand the logic of small amounts being more valuable, to make low level collectors feel valued, but there is no reason AT ALL for capping the upper amount.
To be fair, I think this is the Alex Cruz vision for Avios and 100% payment with points will soon be available, possibly displayed on a single booking screen where you can toggle between points and cash, as the hotel schemes do.