Congress originally limited federal jurisdiction in diversity cases to lawsuits where the amount in controversy exceeded $500. Let me admit that I have not studied this in detail but I was taught that this was to protect defendants from having to travel a long distance to federal court to litigate claims where the monetary value of the dispute was very low.
But today travel is no longer a major concern. Congress periodically raises the minimum amount in controversy to help federal courts reduce their caseloads. If the amount in controversy requirement is too low there will be too many cases in the federal courts. On the other hand, the amount in controversy requirement should not be so high that federal courts only hear civil cases involving large business disputes.