distance between saddle and handlebar is not an isolated relationship. proper fit is dependent upon rider size and flexibility. Proper fitting should involve flexibility tests and taking specific body measurements. This provides a guide as to what frame geometry will work for you. measurements while on a bike is then done to determine proper length for cranks, stem, bar width, etc. however, if you are looking for a quick fit, the two most important measurements to get right are: 1) saddle height 2) saddle-to- bar(hands on hoods).
Along those lines, I just read in "Bicycling for Women" that 1) a plum line dropped from the nose should bisect the stem (true for me) 2) with exceptions for rake, you shouldn't be able to see your front axle (I can; my Terry rake appears to have more of an angle than my husband's Allez, though).
My saddle is about 2" above my bars. I tried dropping my bars lower on Monday, but my shoulder blades entered a world of pain...