Kirk, thank you for additional info!
I did not know "Limit File Size to" only works in conjunction with "quality" setting....
I would expect that setting my preferred output image File Size would get me the best possible photo quality
automatically... You should consider implementing this feature in the next product release?!
It is by design. If you have no control over the quality and you put in a fairly low output size, you'll get an image that is barely recognizable. Having control over the quality lets you say "make it this small but don't ever let the quality go below this level." If you don't care about the quality and only about the size, then set the quality to zero. PM will then have full control over the quality level (which has a direct effect over the final size, along with turning on chrominance sub-sampling).
In your case, the solution is quite simple. Set your size, set the quality to zero. You'll very likely get your desired output size.
We don't consider taking the quality restriction out of the equation a "feature". Keeping the quality restriction is a feature.
-Kirk
