“The only thing missing is the Xbox,” he said, per machine learning translation, “which somehow feels a bit wrong, but that 10GB of shared memory — without years of optimisation experience — is really hard to make work.”

That’s not a financial decision. That’s just them lacking technical expertise. And let’s be real - the S is not some kind of potato. It’s perfectly capable. You need ever so slightly less detailed 3D models and textures than on the X but I don’t remember this being a huge issue during the PS4 generation.

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the S is not some kind of potato. It’s perfectly capable

It’s not. That’s what the OP and the comment you replied to were trying to tell you.

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