It's not an overreach with the specs offered. M1 Pro 16GB should have been the base model for $1,499.
I agree on the Display. At the very most $1,200 to match the old LG 5k with most of the same features.
The problem is the market is saturated with these monitors at specs/prices/margins Apple doesn't care to dabble in and more and more manufactures are even jumping in on the USB-C w/ Power Delivery.
You can find decent 1080p displays for under $200.
Here's a actually decent LG 27" 4k 350nit display with USB-C PD for less than $500:
https://www.bhphotovideo.com/c/product/1467177-REG/lg_27bl85u_w_27_27bl85uw_4k_ultra.html
It just isn't a space where Apple could make a dent because anyone could come along and do the exact same thing for cheaper because Apple is always going to go all out on materials and design. With the Studio and XDR displays they are in a niche where they can can stand out.
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Jumping back to that LG 4k display for a minute... A $1,499 M1 Pro Mac (mini or Studio) and that monitor for less than $2,000 would be an amazing starter setup for someone getting into Design, Video/YouTube, Audio production or a Student. I think Apple is way underestimating the demand for a desktop that fits that price/performance window. I think many people were just waiting for a $400 M1 Pro BTO option on the Mac mini and were not expecting to jump $900 to a full Pro product. As it stands, the spec gap between a Mac mini with 16GB RAM for $1,100 and the base Mac Studio for $2,000 is pretty huge.