It makes sense if you are someone who sold cars with a $10K "autopilot" add-on claiming that they would eventually be capable of "full self driving" for a decade only to realize that it's not feasible from a technological standpoint (at least not before most of those cars arrive at a junkyard [1]) AND the global supply chain suddenly shits the bed - jacking up the price of parts (especially electronics).
At that point, you can either (A) stop selling models that you actually make a profit from and risk your top spot on Forbe's billionaires list or (B) claim that "full self driving" really meant "driver assistance" this whole time [2] and cut whatever hardware isn't absolutely necessary to meet your lowered standard.
Elon chose option B - I suspect through some mix of self-delusion about the capabilities of automated statistics and knowing that he can continue to push the deadline for "full self driving" back another decade and pivot after his competitors have pushed the cost of radar/LIDAR down far enough.
[1]: https://www.nbcnews.com/id/wbna12040753
[2]: https://www.insidehook.com/article/vehicles/controversy-tesl...