Because he can't build from it as it's so small.
Hmm, interesting, I never knew there's such a thing as a piece of terrain you can't build off from because it's too small.
In fact, I distinctly seem to remember that lemmings can generally build off from as little as one or two pixels. After all, in the first version of Taxing 23 Essman posted, you can climb all the way up to the thin pole and build on top of it, and that pole was what, 2 pixels wide, just like this tiny ledge here?
Can anyone show whether this can't-build behavior is standard behavior you can observe in, say, PC Lemmings, or is it just Cheapo-specific? I wonder if the fact that this ledge here is right at the bottom row of pixels in the level has anything to do with this behavior.