I believe the CAPS will work at higher speeds but there is a mechanism within the CAPS which lowers the opening shock. If this system fails, the shock would probably be very dangerous. Since there is no redundancy to this system, it is certified at the lower airspeed.
From a totally practical perspective, if you find yourself in a ‘death spiral,’ suffering from vertigo with ever increasing airspeeds, what choices do you have? Can you manually recover the plane? Doubtfully, if you had the faculties to recover, you probably would have avoided that situation, just ask JFK. So what other choice do you have? Pull the CAPS handle and hope for the best!
Since the next question will be about the part of the CAPS which reduces the opening shock, I’ll try to answer it but please excuse me if I miss every technical term. Also, this explanation was based upon one conversation years ago, so a few details may be fuzzy as well.
First, think of the Apollo space capsules returning to Earth. When they first appeared on TV, there would be three parachutes, but they looked more elongated than normal. This was a partially open situation, where the opening was constricted by a retaining ring holding the risers (lines) of the parachute from spreading out. Then, all of a sudden, the three parachutes would open to their full volume. This occurred because the sliding retaining ring ‘slides’ down the risers and allows the parachutes to open fully.
Well, the CAPS has a similar mechanism, as i understand it the slider is held up by the airflow pushing it up the risers and the parachutes are trying to open and push it downwards. As the speed decreases the parachutes are able to overcome the wind force and push the slider down and all the parachutes to open fully. Unfortunately, if this mechanism were to fail, the ride will be well beyond the “E” ticket ride promised.