I found this (not sure if it applies to you): "Percentage values refer to the height of the containing block. If the height of the containing block is not specified explicitly (that is, it depends on content height), and this element is not absolutely positioned, the percentage value is treated as none." from
http://reference.sitepoint.com/css/max-height
I also found this on the
spec page (thought I'd remembered seeing it): "Use of the CSS position property values to achieve absolute positioning (i.e. absolute and fixed) is strongly discouraged."