This isn't exactly news, that model has been at $350 for a while.

It's not like RPi suddenly introduced a 16GB model at a ridiculous price due to having forgotten about low cost stuff. The 16GB model was originally $85 iirc. Then the memory shortage hit. They could either withdraw the 16GB model (maybe screwing over some people who absolutely had to have it) or raise the price for those with urgent enough requirements. They did the latter.

Me, I'd like to see some large MCU's (let's say a little above RP2350 / ESP32 level) with a few MB of memory, but with memory protection, like old fashioned Vaxes with that much memory. That would allow running multiprocessing OS's where the processes couldn't easily clobber each other like on the current stuff. Many programs don't require GB's of ram.

I don't think they can withdraw a model easily, they also supply Pis to industrial markets and they probably have contracts that guarantee supply for a given time period.