What you 'should' spend on a player matters mostly against how much money your league has to buy all the players.
Most auction values you see on line are based on a 12 team league and each person having a $200 budget. That means $2400 to buy your leagues rosters.
If you have a 16 team league with a $250 budget, thats $1600 MORE the league has to spend on players. If you don't inflate your bids on the really good players, all that extra money goes to players who don't deserve it.
Smart dudes inflate and buy the best players.