From what I've gathered, Discover likes you to run a lot of money through their card. I'm not so sure whether you PIF or carry a balance is of much importance to them. I had to carry a balance for a bit, and would run all my money through the card, and pay all my disposable income each month onto the card, thus paying the card down, while also running a lot through it. And even though I was at ~30% util for a while, they were repeatedly giving me increases. In fact, just last month, I got an increase from $5200 to $6300, while still carrying about a $1k balance. They have given me at least 1 unsolicited CLI per year since I've had the card.
Starting Score: EQ: 665 - TU: 687
I got the exact same message when i applied for a CLI a few months ago. I requested $1500 CLI. They said "We can only approve $1500..."
It made me wonder if I should have asked for more, but I did not want a hard pull to find out. The approval through the link was a soft. FYI I have had my Discover for 2 years now and have never gotten an auto CLI. I started at $4500. I PIF each month and it is primarily used for whatever the quarterly bonus category is. I'm not complaining... just saying.