That is not correct. You can install an SSD up to and including 4TB as shown here at Crucial. And you do not have to install a Crucial SSD as any quality SSD such as the WD Black will be fine. Dell lists those smaller SSD because they have not tested any drives larger, but the larger drives will work fine.
I have the current Inspiron 5577 with a 128 Toshhiba ssd that is running out of room.  I want to put in a WD - BLACK SN770 500GB Internal SSD PCIe Gen 4 x4.  Although it may not run at the Gen 4 speed it looks like it should fit and still run. I also do not think it will accept an ssd larger than 500?  Is this correct.   
Inspiron 5577 SSD upgrade