From what I've seen:
Yes, there are guys out there who are in a 'co-pilots for life' situation. This isn't the norm. A problem is going into the copilot's seat without enough PIC time.
Usually the pay aasociated with a co-jo position is why they advertise for 500 hours, they don't expect to get more. Those higher time SEL guys who wish to make the transition and are willing/able to accept the pay are welcome in that they are better candidates for quick captaincy if a position becomes available.
Hope this helps. All my opinion.