There are plenty of reasons to consider not replacing the existing iMac with a 24-inch, but
Absolutely not.
New M1 iMac are literally garbage and you can't custom or repair them later.
They aren't future-proof. Strong memory, storage and architecture limitation.
And if the storage or any part burn then you can throw it to the trash can.
Maybe in the future if Apple will change its policy.
Your 2019 5K iMac is an amazing machine and you can upgrade or repair it with a few bucks if you need (SSD, memory, screen).
Basically an immortal machine.
Furthermore the base 2020 24 iMac has a 4.5K display, not a 5K.
none of this nonsense.
While it is entertaining reading, objectively it isn't at all helpful, or even that accurate.
If I were in this situation (my 27-inch iMac was a 2015 model, not 2019, so an easier upgrade proposition), I'd be looking almost entirely at what my system was used for, and matching that against the capabilities (meaning, real-world, not imagined) of the 24-inch
2021 (not 2020) models.
If, and only if, I could be certain that the M1 model could do what I need, I would then consider the value of the 2019 27-inch, and whether it could be sold to offset the cost somewhat, or handed on to someone deserving for them to put to productive use.
In my case with the 2015 iMac, I was expecting speed and overall performance benefits of the M1 and SSD, and was ready to spend a little extra money on replacing old (32-bit) apps I was still using. What I got totally surprised me, because the performance of the new iMac against the old one was almost like night and day.
And while I would like a bit more screen size because I was used to the 5k 27-inch, it was actually a bit too big. 4.5 turns out to be plenty, and a bit more manageable, though I found it necessary to be a bit more harsh on deciding what I would leave open and what not.
Ultimately, the idea that Apple will miraculously come to their senses and revert to building systems the like of which we haven't actually seen from them for a couple of decades is just plain silly. They won't. A few naysayers who don't like what they see are rather less well positioned than Apple are themselves to understand the markets they are aiming for and the product roadmaps that will get them there.
Whether we like it or not, this new system strategy of theirs is here to stay, perhaps for a few years, perhaps a lot longer, so while it is perfectly possible to cling to great systems from the past (and I still use my G4 mini, amongst others), the systems we are seeing now are the beginning of the 'next generation' of Apple products, whatever any individuals amongst us might prefer.