I'm at a crossroads right now. I just sold my 16" M1 a week ago because it was brick and I never wanted to carry it around. I want the size and color of the M2 Midnight Air, but after upgrading the RAM and SSD, this new $1599 M1 14" sale is almost too good to pass up.
I was in a similar position as I sold my 16" M1 Max a while back. If the size and weight was an issue for you then I am not so sure the 14" would be much better. It is a lot lighter than the 16" for sure. However the 14" is not light.
I actually pre-ordered the 14" M1 Pro MBP when it came out and returned it for a 16". I have had both. Now I have the M2 Air in Midnight in the exact config you are considering.
You know what the M1 can do and you know the battery life on the 16" which is considerably longer than the 14" just so you know. Also the 14" has a lower speaker volume than the 16". The base model has an 8 core cpu vs the 10 core on the 16" and it has less GPU cores.
All that being said it is still a good machine for those who need that power.
My biggest question would be how did you use your MBP? Did you do a lot of video editing? Did you do anything that would seriously tax the CPU or GPU or both?
So I would say your use case and desire for a lighter weight and size would be the biggest determining factors.
If you don't do heavy extended cpu/gpu workloads then the M2 MBA would be much better than the 14" but if you do those type of workloads then the 14" would probably still be the better choice.
All that being said the M2 MBA does not throttle like so many say under most conditions and you could use a laptop cooler if that ever became an issue. BUT again if you are doing multiple streams of 4k editing or rendering 3d images etc. then the Pro line up is really your only choice.
I would not get caught up in a "deal" because it will make your purchasing decision irrational and not actually based on your needs but perceived value at a certain price point. Think about your NEEDS first then your wants and that should give you an answer. You have to live with your decision and I doubt you want to be in the same place you were when you sold the 16".
I think the best thing to do if you have determined that the air fits your needs and use case is to order one.
Check it out for yourself. Then you can make an educated decision and you can always return the air if you don't like it. Don't worry about the sales on the 14" MBP I doubt they will be going away any time soon and if they do there will be more sales during the holidays and if and when the M2 MBP's 14/16" are released.
I can tell you from my experience the M2 MBA is so much better for my use case and needs than the 16" ever was.
The M2 is noticeably faster in day to day tasks that can utilize the higher clock speed of the M2 short single threaded burst tasks. Web browsing for example is faster. Opening apps and interacting with the UI is faster. The battery feels like it lasts as long as my previous M1 MBP 13" which is a long time and made me like the M series chips. With the Pro chips even with much higher capacity battery I felt there was a bit of a regression in battery life. Obviously more performance equals lower battery life, specially under load. The M1 Pro MBP 16" with 16gb ram did last a good amount of time to be fair but the 14" and M1 Max 16" were noticeably less.
Coming for the 16" which I agree was a brick the M2 MBA is so much more user friendly. I enjoy using it and I have an iPad and almost wonder if I need it. The screen is bright and really nice. It doesn't have any flickering or Blooming which I experienced on the mini led screens. The blacks are not as good though and if those two things don't bother you then the screen on the MBP would be better. I really don't see any difference I terms of brightness or the Pro-Motion which I thought I would miss. The mini led screens have such a poor response time that text still blurs like a 60hz screen even though it is a 120hz screen. So I honestly don't think you will miss much in terms of the screen.
The Speakers on the 14" are good and have a good amount of richness and bass but for me I could never get them loud enough when watching videos and other content. While the M2 MBA does not have the same depth and bass of the 14" it get surprisingly loud and is very clear with good stereo separation. They still have some bass but it is not the same as the 14" or 16".
The keyboard honestly feels a bit better on the MBA and that probably has to do with the size of the device vs the 16".
The size and design and Midnight color are what really makes this a great laptop. The performance of the M2 chip is really fast and like the 13" MBP and older M1 series devices with the regular 8 core M1 chip you get the best of both worlds. The amazing single core speeds and decent multi core speeds and with 4 efficiency cores you get a lot better battery life than the Pro cpu line. The weight and thickness of this laptop are perfect.
The M2 Air is solid as well. It is not so light that it feels delicate or cheap but like the previous air it feels very solid. I can pick it from the corner which I often do and there is no flex or creaking. The keyboard deck doesn't bend under pressure. It is a solid device yet because of the lack of fans is still thin and light. To me it is the perfect balance of sturdiness and lightness.
For me there has been no looking back. I don't miss the 16" at and for me at least I feel like I bought into the idea that I needed a Pro type device just to have decent performance and all the specs tempted me so I bought it. When I got it I realized those specs didn't mean very much because I didn't actually utilize them. Now with the air I appreciate the fan-less design, the great battery life, the great screen and keyboard, the design and feel of the air. I do like the new color as well. So it has been an eye opener for me and what I was trying to get across to a lot of people on this forum which is sometimes we think we need something more than we actually do and when you get what you actually need you are much happier.
I hope that my experience of the different devices helps you. If you have any additional questions please respond or message me and I would be happy to help any way I can.