"In addition, it reveals the diminishing prestige of the dollar and the increasing concerns others have for its reliability as a dependable store of value.
Wouldn't the fact that the €500 notes are at least 5 times as compact as the $100 bills have something to do with the switch?
The U.S. (& Canada) stopped printing these large denomination bills because of their use in crime. How long before the E.U. wises up and stops printing €500 notes?
There is an assumption in your question that the people in charge of printing the Euro did not plan on this happening.
One euro is about $1.27+/-. 5 euros is about $6.35. So, yes, 500 euros is at least 5 times more than $100. Even more than 6 times.
yitbos