[QUOTE=jur]- the seat post has to be below the top tube where it joins the seat tube."

Not true. Think back to the days when girls' bikes had top tubes that were 20"+ below the top of the seat tube.

The idea is to insert the seat post deep enough so that it has enough purchase to hold securely. If it is not in deep enough it can work its way out, leading to possible injury to the rider, and damage to the seat tube.

"Soooooo, why is that shim so short???"

Just how short is the shim? You haven't told us. Shims do not need to be the same length as the seat post they fit around. (Imagine a seatpost that sits 20" inside the seat tube, with a 3" shim. That should be plenty safe).

Bob