Usually when you parallel you decrease by more than one size. If VD is a problem on say #14, you put in 12 or 10. Same principle applies. So maybe you don’t go from say 500 to 250. Maybe only 350.
Agreed on labor but also there is significant increased labor hours especially above 350. Most electricians can bend 350 coarse strand without tools, pull short runs, etc. As size goes up you have to start using a lot more tools, planning, etc. That increases crew size and time. For distribution wiring generally speaking up to a point materials are cheap, too. So even low cost labor drives those costs. It’s only when materials get to 75%+ of the job (switchgear, large motors and drives) that labor is not critical. It’s worse on mechanical jobs where labor is 90%+.