The reason for #1 is because fluid layouts can force text lines to stretch on wide screen monitors. As such, the line becomes harder to read.
Its sister element with id "rightelement" is actually fixed width, but I don't see the issue there since the majority of its contents are image elements and not text.
---
That said, I agree with you set a max-width for text only enclosures, and a min-width for enclosures that have image elements.