I know some others in this thread have mentioned it, but I would like to add my voice to the chorus requesting a smaller minimum height.
From my perspective, 250px is an absolute necessity as a designer. This would ensure a twitter timeline widget can be placed in a layout where it may need to be aligned to an M-rect ad (300px x 250px).
While extra height is not an issue on a standard content page, on a home page content blocks often have to relate specifically to 250px height, and if Twitter desire timelines to be embedded on home pages then allowing heights down to 250px is a requirement.
I hope this can be incorporated in the near future, otherwise we will need to use hacks or forgo the timeline entirely.