I think the obvious point that some are trying to make here is:
If you assess an event and come up with a favourite at $1.60. The best price you can get however is $1.40.
For that reason you do not back it, because it is "not value".

Presuming that you rated it as a 62.5 % chance of winning, ($1.60), you also rated it as a 37.5% chance of losing. In a two team situation you have obviously rated both teams.
Favourite at $1.60
Underdog at $2.67

If you can get more than $2.7 on the underdog, then surely you must back it at that price. Why sit an event out because you cannot get the odds you want on the favourite. If it does not provide value then surely the other side of the coin does.....