I've got that offer too. 2 points per dollar would rock, but the 500 (or even 750/1000 as others have been offered) limit kills it for me.
You just have to combine it with other offers
On my dads card he had 50% bonus for 6 months, so he was at 1.5 points per dollar. Then called to get the annual fee refunded and was given a $100 refund and a 100% bonus for 6 months, ends up being 2.5 points per dollar for 6 months with no limit.
Mind you he does use it as his primary card, has had it since 1990, and puts a decent amount on it so they were inclined to give him a good offer...