While many of us routinely spend this amount of money on laptops or other hardware, the average Joe doesn't want to spend more than 600-700 euro on a laptop (which translates to up to $650 in practice).
So yes, for most people, this sounds like a fortune for a laptop.
I think it's actually addressed half of shortcomings of the old Pixel: 4GB of memory has been upped to a reasonable 8GB or a generous 16GB. The CPU bump is also a welcome change. Only the limited disk space is an issue.
I just wished they doubled the storage (at least) and sold them with plain old Linux as developer machines. Would be a great way to get into the hearts and minds of many programmers.