I was just wondering why we couldn't update our bounty to a higher amount while the bounty was in progress. I can understand why we can't decrease it to a lower amount but why not to a higher amount?
In my opinion, the easy answer is that there is little benefit in doing this. The following points come to mind (mostly taken from How does the bounty system work?):
You mentioned this already, but if you allow people to increase an existing bounty, you most certainly will have users wanted to lower it, stating that they mistakenly issued a too-high bounty and want to reverse it somehow. Would this also become a possible feature request?
When you increase an existing bounty, how does that affect the existing bounty? Do you extend the bounty period anew to the traditional 7-day tenure or does it stay the same?
Do you notify the community of such a change in bounty by bumping the question to Top Questions list or not? If not, how would an increase in bounty attract more attention to the question?
Does the new bounty only affect new answers, or does it also pertain to answers that existing during the first (lower) bounty? Here's a question with some reference to that: What happened to the bounty?
Would an increase be allowed arbitrarily (from 100 to 150 rep, say) or should it adhere to the doubling of the current system (from 100 to 200, say)?
Sure, all of the above points may have valid and justifiable answers. However, an easy alternative would be to just wait until the bounty period is over, and issue a new one*. The network is set up to deal with that, and some users have already done this multiple times.
*...that is at least double the amount of the previous one because, like gravity, it's the law.