Why does Apple want to turn its 'entry level' Mac into a high end one?
It is a fallacy that the Mac Mini is restricted to being an "entry level" Mac.
Sure, it might have started out that way many years ago - but times change.
The Mac Mini should now be seen as a desktop computer for anyone who wants to Mac that has an external monitor, without being restricted to an all-in-one, and who doesn't want to spend upwards of USD$6,000 on such a desktop.
Do you have any familiarity with building PC's from parts? The current Mac Pro starts at USD$6,000 - whereas in the PC world you can get a very competent PC - e.g. Ryzen 5900X, NVidia 3080, 32GB RAM for around USD$3,000 to $4,500.
So the high end Mac Mini should be the Apple equivalent for people who want a desktop computer, with external monitor, in that price range.
If we follow your logic, of never departing from the original notion of the Mac Mini being only entry level, then you realise that means that anyone who wants a desktop Mac with external monitor would be forced to start at the price of USD$6,000. Surely that is not for everyone.