I agree with you. Google had the set the price this high IMO if it ever wants to sell phones at flagship prices. Think of it like this, let's say Google made the pixel this year and the next 2 years with a price of $549. When they raise the price of the 4th gen pixel there is going to be a backlash.
Another instance is if the price for the first gen was $549. Then next year Google adds waterproofing and wireless charging and change the price to $649. There would still be a big backlash.
Its hard for consumers to buy something today at a lower price then pay a lot more for the updated version the next year.
This is all my opinion though.
I see some greed in here on Google's part. This is completely subjective and just my opinion, but I think they are double dipping here. The money they make on advertising and having all my information freely given is huge and what they base their business on, not hardware sales. So I'm basically paying close to $1k so Google can make money off of me? Yes it should be separate from the actual hardware, but it's akin to perceiving higher value for the iPhone due to their physical stores/customer service. I've always stated from the beginning that the pixel should have been a loss leader in order for Google to gain more eyeballs and help their business out. I really have trouble believing Google suddenly wants to make money from hardware sales, although I won't rule it out as a branching off strategy, but not at the expense of less people buying the phones because of the price. The only strategy that makes sense to me is that Google is positioning themselves as the leader of Android in order to save it from the horrible fragmentation which gets worse every year. If that's the case then I applaud Google, but once again they could have done that better with a lower price point.