Why do plugins list a "compatible with" version if it is arbitrary?

I'm not saying that it shouldn't list compatibility.  I'm saying that the current system of automatically changing the published "Compatible with" version every time it is updated for no reason is only helpful to people on the same exact version the developer was using when they uploaded it.  Everyone on an earlier version has no idea of it is compatible (or assumes they have to update the core, which they may not) and everyone on a newer version has no way to know.