For that to happen, I think there has to be room at the bottom for a product that will not cut much into the sales of higher priced iPads.

For laptops, it seems they had/found that room, but I doubt that room is there for iPads. The low-priced product will have to suffice for browsing, reading, and watching YouTube, and I think that covers the use cases for a large fraction of customers.

Of course, they could go for lower prices, hoping for that to increase iCloud subscription revenues, but long-term, there is a risk of (EU) regulations requiring better competition for that.