Believe it or not, the Federal Reserve back in the 1920s printed the $500, the $1000, the $5000, and the $10000 dollar bill, before ending this printing as of 1944, and retiring these currency valuations, apparently, for good, even though $500 today would be worth only about $37 dollars in 1944 currency. While there are all sorts of valid reasons why these currencies went out of favor such as the fact that checks, check-like instruments, electronic transfers, and so forth, have replaced the need for high denominational currency, the fact is that high valued currencies such as the $500 or $1000 if re-issued would be utilized, especially the $500 dollar bill.
That said, there is validity behind the reason why large currencies probably won't be issued again in the United States because cash transactions are transactions that for the most part, the government can't easily monitor or track, to which the governmental preference is cash substitutes of any sort that they can track. While that might be good for governmental monitoring, that certainly isn't a real benefit for people that prefer to take care of their own business without having to justify their behavior. Additionally, in a country to which as reported by millionairecorner.com that: "There are 29 Million Mass Affluent households with a net worth between $100,000 and $1 million," that this would seem to signify that the handling of $500 dollar bills would not be unusual and probably preferred as an option for a meaningful percentage of them.
The fact is, depending upon your family size and shopping habits, it is very easy to spend over $100 on a dinner, or at a grocery store, or at a warehouse store, or an electronics store, or a home improvement store, or for vehicle repair, or for home repair, or in purchasing something as common as the latest non-contractual Apple iPhone, and so forth. While the government might believe that legitimate Americans don't need to utilize cash for any of these transactions, or don't want to make it easy to use cash, the fact is that cash is a legitimate form of payment and of receiving payment and is appreciated for its convenience and because cash is fungible.
For some people, too, there is something magical about money that cannot be replicated by a credit card or a check note, or by coins, but needs to be money, and having in one's possession a $500 or a $1000 dollar bill would just seem to be coolest thing in the world, perhaps giving one a slight dose of dopamine just by touching it. Then too, places that cater to people that like to spend money like water, would appreciate larger denominated bills because the more cash, especially the higher valued denominated cash in one's pocket, the more inclined someone is to spend it, as well as the more inclined the seller is to try to extract it from him.
There was a time when a $100 bill, just seemed like a lot of money, it kind of still represents that, but for the most part it does not, as just about anyone can carry or represent a "Benjamin," and as people like to brag about just about everything, want to show off about just about everything, placing big denomination bills back in the hands of the public, would not only be practical, but would also be fun.