The real root of the attitude should be "We don't accept transactions that would produce more than 20 USD in change." However the average person is an idiot so it's easier for them to just say they don't take 50s/100s. I guess arguably there's a greater incentive to try to use lesser bills to make larger ones, but that's what the watermarks and security strips are supposed to prevent.
It's always a lie though. You can't realistically start a register out with less than $100 of change for a few hour shift. Maybe $50 for really short shift or if there's a manager with safe access who can reload it.
Yes I found this strange coming from Ireland where (during the Celtic Tiger at least!) the minimum I ever seemed to get from cash machines was 50 euros.
Most shops won't take them and cash machines don't give them out.
Which is pretty odd now given how high inflation got here for the last few years.
Here's an article from 5 years ago saying that £50 notes were widely regarded as just used by criminals.
https://www.bbc.co.uk/news/business-48993008