It has 8 GB of RAM because they wouldn’t be able to hit the price point of $599 with more; their target audience doesn't need more. It's also why the SSD is slower than a MacBook Pro or MacBook Air; it's the only device in the lineup other than the entry-level iPad with a sRGB display; the other devices have P3 Wide Color Displays. No Thunderbolt ports, only supports 1 external display and only at 4K. No Wi-Fi 7.
These are some of the compromises they made to keep the price down. They're also using a binned A18 Pro with 5 GPU cores instead of the 6 core version in the iPhone 16 Pro and Pro Max.
There are lots of potential customer for which a Mac laptop was out of reach; it's a lot more affordable at $49.91 /month for 12 months for the $599 model.
Its display is better than PC laptops in the same price range, but that display is a non-starter for graphic designers, video editors, etc.
That's why cannibalization is a non-issue.