Because neural action potential and refractory periods last on the order of 2 milliseconds, neurons cannot generally fire >500 action potentials per second. At sound frequencies <500 Hz, a large percentage of neurons in the cochlear can fire every sound cycle, encoding sound frequency by their firing frequency
Because APs and refractory periods last on the order of 2 seconds, relative width between different place codes wider @ <500hz, slow enough to encoded sound frequency by firing frequency. But >500hz means this cant happen, so more place codes are needed to encode sound frequency.