Remind me again what kind of approach they where on?
It is NOT uncommon for crews on visual to fly (controlled) closer to terrain than 500ft, even in darkness! (The world is after all not flat.....)
At what height (bear in mind that ATC does not typically have terrain contour displayed on the scope) should the controller intervene? 1000ft? 800ft? 700ft? 500ft?
Do tell......