If you use the @e[r=1] on an entity the radius wouldn't testfor anything below the entity.

Example:
/execute @p ~ ~ ~ testfor @e[r=1,type=Silverfish]
If you now run this command while standing 1block above a Silverfish the command will return: "Failed to execute 'testfor @e..."

If you have a look at the picture below you can see marked with red glass the area that get's checked and in green the area that I would expect to be checked using the r=1 on an silverfish.

On the left you can see 2 silverfish and the bottom one can detect the one above but not the other way round.

All the above works the same for every entity.