It makes sense after you've seen people argue that their 'losses' and betcaps are "proof" that a favored gambling strategy is a "sure win".

Same reason casinos promote grand stories of card counting blackjack sharks bilking casinos and pretend to be concerned about card counters,  while simultaneously employing multi deck continuous shuffling machines that moot card counting.

Question is are you being actively scammed?
What have you learnt about zero-confirmation transactions and how safe they are?

We know there are theories as to how you could be scammed etc.. but would be interesting if they are actually occurring in the wild, and if there are any changes the bitcoin that could fix it or at least make it harder.

Having to wait 1-6 confirmations is one of bitcoins few weaknesses, so knowing if zero confirmation transactions were reasonably safe in the real world would be "news".

Is this just a natural consequence of martingale type betting strategies? Players start with small bets, go on a losing run, doubling up each time, so there are string of profitable small bets for SatoshiDice and then player finally gets a winning (larger) bet, so those larger bets are less profitable from SatoshiDice's point of view.

Since I wrote that, the effect has stopped.  Now the big bets are more profitable than the small bets.

How is it even possible that such a large population of independant events (those bets up to 4 and those above 4) can differ so heavily from the mean (0 level)? Shouldn`t they even themselves out?

Note that the profit is almost up to what would be expected if the house had a 1% house edge all along:

Pretty incredible to see over a million dollars wagered already.

The house edge is determined by the payout when you win.  The chance of winning is always the same - it picks a number between 0 and 65535 and you win if the number is less than 8000.  Your calculation is off a little because 1 - 8000/65536 isn't 7/8, it's a little more than that.

I make it a one-in-17399 chance of losing all 75 bets, so still really unlucky.  But then again 1-in-17k shots do happen.  About once every 17k bets.  And there have been over 600k bets.

 >>> 1 ((1 - 8000/65536.0) ** 75)
  17398.822919111808

Here's the same for losing a 50/50 (less than 32768) bet 3 times in a row to sanity-check the calculation:

 >>> 1 ((1 - 32768/65536.0) ** 3)
  8.0

and as you would expect, that's a 1-in-8 chance.

What's puzzling me is the payout for the SatoshiDice bets.  A 0% house edge would pay out 65536/8000 = 8.192x.  And so a 3% house edge should pay out 3% less than that, or 7.94624x.  So why does the SD website say it pays out 7.910x?  7.910 * 8000/65536 is 0.965576171875, ie. a house edge of 3.44%.

Not that it makes any difference to you, since you only get the payout if you win a bet...