The altitude of the ISS orbit is bounded by several variables:

1) above 500 km radiation levels increase, particularly in the South Atlantic anomaly, making it hazardous to both crew and equipment.
2) the Soyuz and Progress vehicles are certified to an altitude of 460 km.
3) the ISS needs to be frequently resupplied. Higher altitude means more fuel consumption which means less cargo capacity for the visiting vehicles.
4) assembly challenged required delivery vehicles to carry their heavy payloads to the ISS altitude.
5) the scientific objectives can be met at 400-460 km.