Which seems a bit unusual to us outsiders, seeing as a lot of other major currencies with value roughly comparable to USD do just fine with coins for 1 and 2 denominations (EUR, GBP, AUD, CAD, NZD).
There's a difference between the workability of a currency system using dollar coins and the desirability of dollar coins over paper money by individuals. For the monetary systems you describe there is no alternative to coins. That the systems "do just fine" is irrelevant to the question of whether or not people who use those systems would prefer to use paper "dollars" (or Euros, etc.) if they were available. I'm sure if the US got rid of paper dollars by fiat it would also "do just fine", but whether or not that's a change the public would appreciate is an entirely different matter.
I don't think you're going to find a lot of Europeans pining for smaller denomination bills to replace the highest denomination coins. Especially if you show them how disgusting a random 1 dollar bill looks like. I say this having lived through one full currency redesign and one instance of a dozen countries switching to another currency entirely. People had complaints, but replacing notes with coins was not one that I heard.
Apparently there's a difference in priorities. Some people prefer an illusion of no inflation with a greenback as strong as ever. Others might prefer making the high velocity currency units durable and easy to handle.
Indeed. However, I have not heard of any widespread dissent or disapproval of the changes either. The closest thing was the introduction of the 10 HKD coin (in parallel with the bill) which was not popular and is no longer made. Anecdotally, very few in Canada seem to mind, and I'm glad I don't need 10 quarters to do a load of laundry.
Nobody else spends dollar coins, so young cashiers sometimes don't even recognize it as currency they have to accept. The government would have to stop printing dollar bills for dollar coins to really see use.