Well I guess I can't explain things very well but... it's a little different when you already know that about 400' feet away is a ram statue. Did you ever talk to anyone and ask them, "Hey what did you think about the ram statue by the field?", and have them reply, "The what?", and then you wondered how they could possibly miss it?
Some people are just oblivious. 
I'm just saying that I've played a bit of paintball, and there's a difference between knowing someone is about 150 feet to your 10 o'clock because you've been stalking them for 10 minutes and nervously glancing around hoping to catch some camouflaged movement at that same distance out of the corner of your eye.
And failing to spot mountains and the moon? C'mon, that's silly. The DM's guide does say that the vast majority of the time the players don't need to roll to notice the blatantly obvious, if only because excessive rolling slows down the game. Spot is only used for things an average person might not immediately see.
So it's mostly DM fiat in the end, ain't it?
The point is really not people hiding, or even moving tactically. But seeing a walking group of people across flat plains, even with just a casual sweeping look (like anybody just walking along the plains has plenty of time for), should be possible at around 900 to 1200 feet. YES the terrain has to allow it, but we're talking about the hard limits these rules impose. I would use those rules for opposed checks, nothing else.
The point is: D&D characters are assumed to always do the optimum in their situation, anyway. Which is why they, for instance, get free reactive spot checks vs. a guy arbitrarily hiding from them. So they SHOULD also be assumed to not just look at their feet while marching around the country-side. On horseback it's even easier, at least at overland speed. You could even assume to be always taking 20 while mounted, because directing a mount even in combat is a free action (with a piddly ride check), it should be plenty free during overland travel.
Forests are entirely another matter. I don't think those distance are too far off the mark. And within hills or mountains I would say you just have to make a game map. You can see from one rise to the next rise, or a long way from the highest peak.
Personally, though, I don't like the system of these rolls for maximum distance.
Massive House-rule aheadI suggest: A terrain modifier on the spot check, and let the spot check decide maximum distance.
Let's say noticing a medium creature in unobstructed view which is not trying to hide, and while casually looking around, as if during overland movement, is a DC
01 at, let's say 30 feet. [edit]Changed this or else my numbers are ALL off.[/edit]
Now on a given spot roll every +1 over that increases this distance by 30ft.
Terrain puts a percentile modifier on that distance.
Creature size puts another percentile modifier on it
Obstruction, i.e. undergrowth, high grass, clumps of trees, etc, put another percentile.
Distraction has the usual -5 modifier on the check
Lighting conditions modify the check
Special conditions modify either the percentile or the check, for example, noticing a group of torch-bearing people in the dark can be even easier than spotting them during the daytime, so this modifies the percentile.
All the percentiles in the end are added up. You roll your check, apply the percentile, and that's the distance at which you automatically notice a creatures that is not trying to hide. One roll may also determine several sightings: For instance the total percentile to notice a Huge Dire Elephant in a forest may be something like 50%, but the band of halflings end up at 30%.
What this does is putting the focus on the character, and not on a fixed distance roll. It also cuts down on rolling: You make ONE roll, which counts until you see something. If something happens, for instance a fight, then you make another roll after that, when you move on.
A character who does nothing but spot checks, or devotes at least a move action to spotting each round, can be assumed to take 20 all the time.
An example:
Todd the halfling Ranger has a +10 spot modifier.
While walking through the plains, he rolls a 12, giving him +22 on his spot roll.
With no modifiers, this equates to noticing a medium creature, without any obstructions at 660ft
He is small, which imposes a -10% on the distance percentile
There is high grass, which imposes a -30% on the distance percentile.
There is mild rolling of the terrain, which imposes another -15%
Now there's a -55% on the distance percentile. This equates to noticing a medium creature at 297ft.
A small creature subtracts another -10% -> 231feet
A large creature adds +10% -> 363 feet
Now you might want to roll to the closes 5 or 10 feet.
Now Todd gets on his riding dog mount. He is now of medium height (eye-height counts). He can direct his mount as a free action, he can therefore take 20 on general spotting all the time.
His spot check is now 30, equating a 900ft distance to spot a medium creature without obstructions. He can notice a medium creature under the same conditions as before at 495ft. He can notice the same small creature as before at 405ft, and a large creature at 585ft.
He enters a forest, which imposes a total -80% terrain modifier(maybe made up of -60% for trees and -20% for undergrowth). So it's 180ft for a medium creature, 90ft for a small creature.
A tiny creature might already reach a -100% percentile, now we need a defaul rule: While you can see under the lighting conditions you always notice someone who is not hiding at 30ft. If you can't see, then you'll have to resort to listening.
Now he might climb the highest hill in the area. He gains a +30% on his percentile for high ground.
We can use the same mechanism for opposed rolls:
Your base increment of distance is 30ft for +-0. Every additional 30ft impose a -1 on your check. Now apply the distance percentile, but without counting the modifiers based on the size of the spottee (BUT counting those of the spotter) to the 30ft, and you have your new distance increment. For instance, in above example of the plains, to notice someone who is hiding, Todd riding his dog will take a -1 to his spot check every 16ft. To notice a hiding creature at his maximum distance of 495ft he will take a -31 to his spot check - this is rather futile. So even the simple ACT of hiding will drastically reduce the distance you can be spotted at. But at around 160feet he has an even chance of spotting someone without a bonus to the hide skill.
(Now look what this means for sniping: The sniper could put an arrow into him, hide with -20, and still be pretty well hidden.)
As a further provision, of course you can't take 20 on opposed spot checks unless you already know, or at least suspect, something is there, and you are scanning a limited viewing angle for a prolonged amount of time. You take your two minutes on that area, and then you can take 20.
