"Equitable being that I can get the outbid notice and be able to make a move if I was willing to pay more."

What makes this "Equitable." Or more "equitable" than the other methods?

"but why put i n a max bid if I can get it for less."

This statement suggests that you don't understand the proxy bidding system.

"So equitable means, its better for the seller (he potentially can make more money via a bidding war) or for the non-sniper (who may get a chance to rebid) but more importantly, its better for ebay (and its stockholders) who make more on a higher end price."

Thats not the definition of Equitable. I also think you are mistaken about the effect the proxy bidding system has on final prices. I beleieve that without the proxy bidding system overall prices realized would go down, though some indfivdual slaes may be for higher amounts.