It is fine to upgrade to the 500w psu which will then enable you to install modern discrete gpu such as RTX 3070 in 7000 tower. Dell has validated these gpu per 7000 tech sheet  NVIDIA® GeForce® RTX 3070, 8GB GDDR6 (optional)AMD RadeonTM RX640, 4GB GDDR5 (optional) AMD RadeonTM 550, 2GB GDDR5 (optional) AMD RadeonTM 540, 1GB GDDR5 (optional) Dell has validated these oem psu specifically for 7000 tower 240W internal power supply unit (PSU), 85% Efficient, 80 Plus Bronze260W internal power supply unit (PSU), 85% Efficient, 80 Plus Bronze400W internal power supply unit (PSU), 92% Efficient, 80 Plus Platinum500W internal power supply unit (PSU), 92% Efficient, 80 Plus Platinum  
I have been trying to upgrade the power supply to my Optiplex 7000, upon ordering it was possible to receive this computer with a 500w power supply, however I went with the 260w instead. I've been trying to upgrade this computer to be a mid-range gaming PC, but did not know that it would not accept third party power supplies. I had tried to purchase the 500w upgrade that would have gone with this computer (part VFFKJ), but before I ordered I was informed that it was not advisable to upgrade, however I do not trust this assessment. I assumed this was an attempt to try and sell me a new computer instead of upgrading, but it has left me with just enough doubt that I feel obligated to ask the dell community. Should I go through with this upgrade? Any help and advice is greatly appreciated.
Help with upgrading the Power Supply of an Optiplex 7000