As to how it happened -- bad luck and bad rules. Player got burnt on the first row with a double (Queen I think), hedged bet on the last play of the second row with a double Ace.
Jim does say that the minimum bet is $50 at the beginning, so if that's all they have going into the Big Bet, that's the minimum bet.
Do the written rules specify bets must be in $25 increments? Neither Perry nor Eubanks said it specifically, and I'm not aware of anyone trying to bet $51.
It was entertaining watching the 8 get mauled by the freeze bar, though I'm sure at least one someone behind the scenes was slightly grumpy when it happened.