I heard its so people can't carry around a ton of money. 1 million in $100 bills takes up way more room than if it were in $1000 bills. 10,000 $100 bills compared to 1,000 $1,000 bills. It's something to do with smugglers and stuff.
"The Federal Reserve began taking high-denomination bills out of circulation in 1969. As of May 30, 2009 (2009 -05-30)[update], there were only 336 $10,000 bills known to exist; 342 remaining $5,000 bills; and 165,372 remaining $1,000 bills. Due to their rarity, collectors will pay considerably more than the face value of the bills to acquire them. Some are even in other parts of the world in museums.
For the most part, these bills were used by banks and the Federal Government for large financial transactions. This was especially true for gold certificates from 1865 to 1934. However, the introduction of the electronic money system has made large-scale cash transactions obsolete. When combined with concerns about counterfeiting and the use of cash in unlawful activities such as the illegal drug trade, it is unlikely that the U.S. government will re-issue large denomination currency in the near future, despite the amount of inflation that has occurred since 1969. According to the US Department of Treasury website, "The present denominations of our currency in production are $1, $2, $5, $10, $20, $50, and $100. Neither the Department of the Treasury nor the Federal Reserve System has any plans to change the denominations in use today.""