Bukkit/CraftBukkit — pull request #500 by epuidokas (2011-10-11 01:48:14+00:00)
Title: More accurate reach limits on blockdig and useentity

* Account for player's eye level by adding 1.58 (average of regular and sneak height) to player's Y position
* Lower the max distance to ~4.85 (max distance of 4 + edge of block to center-point of block)

If you aim high, there are actually certain valid blockdig packets that the server will ignore as a result of not accounting for the player's height. Though the main purpose for this is to prevent clients from reaching past the max distance.