Stupidest House-Rule ever, besides removing the 5' step.
Sorry, I have a bit of hostility towards this one, because I was forced to PLAY under it by my friend who started DMing (usually I'm the DM) and he sprung it on us about 3 sessions into the adventure.
The rule lasted 2 sessions before he gave up, and agreed it didn't make sense.
Max-Dex bonus is something that is supposed to balance out characters that don't wear heavy armor, but still allow them to dodge attacks. It is there so that you cannot both wear a tremendous suit of Full-Plate, AND be a speedy character stacked on top.
You have the full-plate knight AC route, where you rely on armor,
and then you have the stealthy rogue or swift monk AC route where you rely on personal abilities.
The max-dex was not put into the game with a thought towards balancing saving throws or attack rolls. It didn't make the game "more realistic" or "more fun" when we added this rule. All it did was make my ranged combat character much less effective in combat, and make me want to create a different character, because I couldn't hit crap compared to anyone else in the group.
In the campaign where I had created an Archer, my first Ranger...
it made me SOOO happy that the fighter could get Bull's Strength, and I couldn't get the DEX equivalent.
It made me VERY happy that the fighter could get Gauntlets of Ogre Strength to increase his attack and his damage, but I couldn't do anything similar with Dex.
The party witnessed it, It pissed me off, and it was changed. My to-hit bonus was something like a full 6 points LOWER than anyone else in the party, and I had 3-4 feats completely devoted to ranged combat.