In theory, I'm not sure $500k is wildly out of line for your first backup half. Average salary on the cap in 2025 is $380k, and I'd argue third-choice half is a more important position than positions 12-18 on the roster. You've got to assume you'll be missing one of your halves for, what, 5-10 games across the season what with injuries, suspensions and origin - that's a pretty important role.
Some teams will have a young kid coming through who doens't cost them much, but that's going to be a high volatility option. The best option is probably a legit utility - a Connor Watson type - who won't let the side down in the halves but can be at least a good bench player when the first choice pair is available. Those players are easily worth $500k, but if you can't find one it's still worth having some money invested in someone who can make a decent fist in the halves.
The problem for the Tigers is that Sullivan is a bad fit on almost every level. We already have a really good third choice option in Latu Fainu, plus we have a promising backup hooker who can fill in while the first choice hooker plays in the halves if required. Sullivan is also strictly a 5/8 so doesn't help much if the player he's covering is the organising half (as might be required during Origin). Add to that him not having any utility value elsewhere - at fullback, centre or hooker, say - and we have the situation of paying $500k (and using a roster spot) for someone who will probably only get on the field in dire emergency. That really is salary cap suicide.