I don't think that's the case - I actually suspect macOS and Apple ecosystem is more sticky now than it's ever been for the sort of user who wanted an AIO because they weren't confident about computers.
Everything is ecosystem lockin, and I'd bet that more people would go to a mini/studo & display to stay in the ecosystem, than would go to Windows to get an AIO.
I'd further bet that the number who'd leave for Windows is fewer, and of lesser value, than the costs & opportunity costs of developing a large screen iMac.
For you and me, may be we know that macOS and Windows are very different fundamentally.
But please trust me, many people have absolutely no idea about that. Many people even still believe they can buy a Mac to play Windows games. For them, the difference is the UI.
Can I use Facebook? Yes, then it's good.
Can I use Spotify? Yes, then it's good.
Can I check email? Yes, then it's good.
...
I said many user can just quit. Because all they need is just some basic functions. macOS or Windows doesn't really matter. The surface studio shipped with a pre-installed Windows. Which for them, same as an iMac shipped with macOS.
Plug in the power cord, turn it on, follow the on screen instruction to get to the desktop. Then they can do the basic stuff.
Many many of them never spend $1 to buy any software in Apple Appstore. So, change to MS Appstore is no big deal. They can still get what they want. Especially, in general, Windows has wider support of software than macOS.
The reality is that, Windows is the main stream out there. Android users are more than iOS users. Even a person who love Apple eco system. He still need to frequently deal with friends that has no Apple device. And somehow they learnt how to do what they want without Apple restriction.
For example, a person want to send a photo from his iPhone to he Mac, he may use Airdrop. But how can he send photo to his friends? The answer for them is usually Whatsapp /LINE / WeChat... Which is no OS specific. So, if he quit Mac and buy a PC, how can he send photo to the PC. Then answer will be Whatsapp (despite the photo will be highly compressed by default, which most likely they don't know).
Interestingly, for professional users, they may be easer to be locked by a eco system due to their investment of time and money. e.g. Video editors may not want to give up FCP in macOS but use DV in Windows (this may be not a perfect example, but you should able to get the idea what I am talking about).
But for a super normal home user. There is usually nothing really lock them into the Apple eco system. When the iMac screen isn't big enough, then can really simply gone. And they may never think about that eco system thing before purchase (some of them may even believe that they can restore a macOS TM backup on a PC). Until they get the new PC, then realise it's a bit annoying. But that's it. They can still do all the daily basic stuff without any big trouble (or they still have questions everyday, and asked for help).
P.S. I am an admin of a local Mac Facebook group. Which has ~75k members. Lots of activate discussion every day. And I really see all sorts of interesting questions. Many many many people really don't know what's the difference between Mac and PC. They really believe it's just the looking, or Apple call their computer "Mac". Many of them buy the Mac, and then realise they don't know how to use it. And many of them can quit without hesitation if the computer's form factor isn't what they want.
Right, but a surface studio is something she absolutely can't get from Apple for any amount of money, and still couldn't get if Apple made a big iMac today - it's a high resolution drawing tablet & touch enabled computer, with a proper filesystem, user access, memory capacity, desktop apps etc. It's not an AIO desktop, the way one from HP or Dell is.
If the big iMac had the Surface's touch screen and pen support, there'd be a great rationale for it - but it would cost more than a (mini/studio) plus (Studio display/XDR) plus (iPad Pro).
I'd put money on a 27"+ iPad Pro coming out, rather than a big iMac.
That why I said the main reason behind that particular purchase is the form factor. That touch screen is just a bonus. She doesn't even know what's inside the Surface Studio (e.g. which CPU / GPU / etc). All she know is that's a 28" good looking AIO computer can put on her desk (which only has limited space).
Again, we can analysis this purchase in a very profession / technical way. But many people really won't think that deep. They just want a big screen AIO computer on the desk.
It's not really the same thing though - it's an aesthetic thing only for the iMac. The 2013 Mac Pro, and indeed the 2023 Mac Pro are absolute functionality compromises compared to the products they superseded.
If there was something an iMac could do (besides have one less cable, and be stolen as a single item, rather than require a theif to pick up two things) I'd be making the opposite argument, and hell if Apple refuses to make a giant iMac, frankly I think they should be forced to licence macOS to someone who will...
...but the question is whether Apple will do it or not, not should do it or not. It's petty clear that Apple's strategy is for the iMac to be a low end appliance computer, based on iPad internals, and for the area of desktops that used to be the big iMac, there's your choice of Mini and Studio, with Studio Display or XDR.
There's no upside for Apple to sell a big iMac, which is either going to cost as much as those combos, and people will complain about it being too expensive, or Apple takes a margin loss and erodes the perceived value of the Studio / Mini / displays.
I am not talking about the whole 2013 Mac Pro or 2023 Mac Pro. That example is specifically focus on the storage connection method. So, still the same aesthetic thing only. Still the same "identical function, but looks different".
I don't know What Apple strategy is. And I don't know will they release a larger iMac or not. But TBH, if I can make the decision, I may go with the following.
Mac mini only has the basic Apple Silicon chip, Mac studio has the Pro and Max only, Mac Pro has the Ultra (2x Max) only.
4K 24" iMac only has the basic chip, 5K 27" has Pro and Max, 6K 32" iMac Pro has Ultra.
Macbook Air has the basic chip only, Macbook Pro has Pro and Max.