Huh now I'm curious where you live that they don't do this? In Canada 50s and 100s come out of the ATMs. In Japan, you get 10,000 yen (~$100 USD) in ATMs.
That said, it seems like all of the Bank of America and TD Bank ATMs I use in Boston are starting to let you choose the bills you want on screen. Was recently in Montreal and had the same experience there too so I'm guessing that's what ATMs are trending towards.
Higher denominations are so rare that many businesses don't accept them.
Also, ATMs on casino floors in Vegas dispense $100s.
I've noticed a couple of banks in Canada where, if you ask the ATM for $100, it'll ask you if you want a single $100 bill, two $50 bills, or five $20 bills.
(Maybe Atlantic City, too. I can't remember...)