We will not allow bigger file sizes, we do not want to provide a slow head script because people cant design banners correctly. Especially on gaming sites where 50 members per page are not uncommon, having a 50 kb increase could lead to 2.5 MB more loading of the page. That is a terrible idea and is bad SEO.
100kb is more than enough for a banner, even for gif banner a proper file size usually dont go above 50kb
I think you should offer the option. It should be a webmaster's decision. A simple warning message beside the size setting fields can advise against it. I can upload a 500 KB avatar here. Is that good SEO?
Don't mean you have to allow more. Giving a webmaster an option don't hurt. Just like a webmaster has the option for the number of new members to display.