i can't imagine the lever adjust being broken...but it doesn't hurt to check. Pull the lever out from the handle bar, it will open up the adjuster area. If you turn the adjuster now you should see how the mechanism works. Like I said I can't see there being anything wrong with this as it seems fool proof but it's worth a look.
Also I don't think it's unusual for the 4 position adjuster to feel close to the same in all settings, other 1250 owners could help with that. IF it's your adjuster certainly the warranty should cover it. There should also be a selection of after market levers which may come closer to the handlebar.
Worthy of note is too that I think my stock levers had a pin (rather than a flat surface on my after markets) that rested up on the adjuster...so theoretically had I wanted to get the lever in closer I could have trimmed a little off that.