Recently I bought a cheap Moto phone to take on vacation. I bought it for maybe $120 which is a fraction of what I spent on the iPhone 8. And it was fine. It worked well. It made me wonder exactly what I am paying for with Apple, and I never said when people tried to claim my MBP was expensive compared to a bunch of fat, plastic, crappy laptops on sale at Best Buy. The Axx chips might be CPU monsters but the dated, low-end Snapdragon on the Moto handled everything I tried to do with it. Phones from Huawei, OnePlus, etc. have fast CPUs, OLED screens, security sensors, an advanced OS, good cameras, etc. Apple decided to turn the iPhone into some weird Veblen good which it shouldn't be.
Along those lines... Apple surely thought the XR was great for the aspirational crowd, but it's just too expensive for that. If you can't afford a XR you can get a OnePlus for a fraction of the price. If you can afford a XR you might as well go all the way and get a XS because the difference just isn't that great.
The XR should have been $400-$500 to start if they wanted it to move, but maybe that would be a signal to everyone that the XS is overpriced too.