The current console generation came with a fairly large price hike and Microsoft responded by also releasing a more affordable but less powerful model.
The problem is that a non-technical consumer can go out and purchase a PS5 safe in the knowledge that they're getting the same gaming experience as anyone else that owns a PS5. Someone considering an Xbox now has to choose between the series S and X.
They now need to compare specifications, figure out which one is more powerful and worry whether the console will be able to deliver decent fidelity and performance in newer games.
On another note, it'd be nice to see exclusivity agreements die entirely. Microsoft has always been fairly good at making their titles available on PC and Sony is moving in that direction but still makes heavy use of timed exclusives.