It wouldn't be a maximum if you could increase it.
The reason it cannot be increased is that it allocated on start up. It can only get set before the JVM starts.
What you can do is relauch the application with a higher maximum. e.g. on start you check the maximum and if it not high enough you run the same program except with a higher maximum.
Note: if you use off heap memory, it can be GB or even TBs more as it is not part of the maximum.
As it is right now, java.exe reaches ~280MB max only (before it crashes) - is this normal?
Crashes can mean just about anything and the reason could be just about anything. I suggest you investigate in more detail exactly why it is not working and I suspect you will find that the maximum memory is not the issue. (Unless you have a small 1 GB machine in which case the default maximum memory would be about 250 MB)