We present a study of the electronic and optical properties of a series of alkali halide crystals AX, with A = Li, Na, K, Rb and X = F, Cl, Br based on a recent implementation of hybrid-exchange time-dependent density functional theory (TD-DFT) (TD-B3LYP) in the all-electron Gaussian basis set code CRYSTAL. We examine, in particular, the impact of basis set size and quality on the prediction of the optical gap and exciton binding energy. The formation of bound excitons by photoexcitation is observed in all the studied systems and this is shown to be correlated to specific features of the Hartree-Fock exchange component of the TD-DFT response kernel. All computed optical gaps and exciton binding energies are however markedly below estimated experimental and, where available, 2-particle Green's function (GW-Bethe-Salpeter equation, GW-BSE) values. We attribute this reduced exciton binding to the incorrect asymptotics of the B3LYP exchange correlation ground state functional and of the TD-B3LYP response kernel, which lead to a large underestimation of the Coulomb interaction between the excited electron and hole wavefunctions. Considering LiF as an example, we correlate the asymptotic behaviour of the TD-B3LYP kernel to the fraction of Fock exchange admixed in the ground state functional cHF and show that there exists one value of cHF (∼0.32) that reproduces at least semi-quantitatively the optical gap of this material.