It is clear that Jony Ive no longer has pull amongst the Apple executives.
There are some things that I've noticed over the years as an Apple user.
Steve's 2x2 grid was meant to take advantage of economies of scale and bring the company back from the brink.
Apple has been very good creating disruptions in the market with the iPod, iPhone, and AppStore. So good in fact that the company now sits on a massive cash pile.
Apple has long designed products to hit a particular price point. The price of a well equipped Mac has not changed much since the PPC days (my 12" PowerBook G4 retailed at $1799, but sold for $1399 at the edu price). When R&D costs are incurred on redesigns, the previous design stays in the lineup to maintain the low price point until some multiple of the R&D cost is recouped and then the 'new' design gets a price drop.
We now get base configurations that have lower specs than many of us would prefer because Apple knew they saturated the market at their preferred price points and held on to slightly lower spec machines to lower the starting cost to expand the market. That market has stagnated and is beginning to shrink.
In order to rejuvenate growth in the Mac line, Apple now must look to a new market segment. If they truly believe that Apple Silicon and macOS can fully take on Windows and the PC market in an era where cross-platform compatibility is at an all-time high and growing, it is the time to make that happen. In order to compete, they need a machine that will compete with the upper end of the big box store PC models that retail in the $600-$700 range. The M1 SOC has the potential to mop the floor with the competition in that market (I can't stand it when I troubleshoot those machines for friends and family).
Apple is not on the brink of bankruptcy like it was when Steve came back and simplified the business model. They are now a megacorporation. They have the resources now to expand into market segments they ignored in the past, across their product lines. Additionally by expanding into a much larger user base, they have the potential to expand services revenue by a wide margin. Again with governments railing against the AppStore, services is going to need to see substantial growth in the mid-term. Many more users will provide that growth.
I can't say that I'm thrilled Apple may be exploring the higher end entry level PC market, but it makes good business sense now, unlike in the '90s. That said, it has been a long time since I've experienced a large enough slowdown on a Mac to make me feel the need to buy a new one. An M-series Mac really is a local cluster for the types of analysis code that I used to write making the need to submit to the grid nonexistent until final production of the data for a paper is required. A $600-$700 entry level Mac would suit me just fine these days.