Yes, my thoughts exactly. He could had made 100x that money on the black market, so no wonder we still have problems with 0days traded there.
How long would you work for $1,000? Some days, a week, two? If you spend more than a week on this problem it seems not worth to report it... On the other hand, if you set the incentive for bug bounty too high I imagine all sorts of cranks pop up, that want to show off bugs that are not there, and resources will be bound to this task -- they have to be verified, and analyzed even if its a bogus report (and in the worst case it will not accomplish anything).
Where is the middle ground?