You really think a student buying a $499 Mac mini (actually, $697 since they'll need a mouse and keyboard for it) is going to drop $1499 on the Studio display? It would make sense to offer a reasonably priced display for those type of buyers.
Sure... and if Apple offered a $600 'affordable' display, most of them would
still buy a $400 Dell or use a TV - which are cheap because they sell in vast numbers and most of the profit comes from upselling people to extended warranties and $100 decaffinated copper HDMI cables. Apple are not going to get out of bed to compete in that market.
Apple don't have a history of 'me too' products - they tend to focus on areas where they can offer something distinctive. In the case of the Pro XDR display and Studio displays, Apple have about the only 220ppi displays on the market, so they can charge a hefty premium (AFAIK the 5ks from Samsung et. al. announced earlier this year are still vapourware, so it's really just the LG Ultrafine - and last I looked those were like hen's teeth).
You're unlikely to see a 5k display for much less than the thick end of $1000 - and while the disadvantages of a 27"+ 4k display on a Mac have been grossly exaggerated, they
do exist and Apple might not want to put their badge on it.
I'm not sure how we got the sub-$2000 entry-level 5k iMacs - which were always a steal by Apple's standards. Some of that pricing might have been based on an assumption from 2014 that 5k displays would become commodity items within a few years - turns out that only Mac users give a wet slap about 5k because of the way MacOS (doesn't) handle UI scaling. Although I doubt Apple were making a
loss I doubt they were getting the profit margin they usually enjoy.
Also... OK, I wouldn't
personally buy a Studio Display (no alternative display input, $silly extra for a decent stand vs. all-or-nothing VESA option, fixed - effectively - mains lead, laptop charging capability I don't need, speakers I don't need + I prefer a dual-display setup which would be
ridiculously expensive). Your mileage & opinion may vary. However, there's no doubting that the picture quality is excellent and the resolution hits the sweet-spot for MacOS - so if you consider that it is something you could be using for the next 5-10 years over several computer upgrades it might not be a bad investment.