Assigning more connections you can run OOM when mysql gets a sudden increase in connections, I've seen it before on servers, they die, swap, whatever .. it's not a pretty picture
They stay in sleep state, true, but they aren't re-used (although, so it seems on my server), they need to time out before they are being dropped, so eventually you'll run out of connections.
I'll give the max500 a try and see how it goes, i'll also check and see if it's possible to limit the amount of hammering postfix does on the server.