Value is subjective for everyone. But to your point, no, the iPhone 8 can’t do everything the Max can, at least in terms of the biometric security with Face ID versus touch ID, that’s entirely different experience using Face ID for Apple Pay, ect.
Realistically, the iPhone 5.8 XS starts at $1000, the max starts at $100 more for the base storage, I really don’t think it’s that ridiculously overpriced, but is it attractive for every consumer? No, but for those who are wanting a larger iPhone size, they may see the value in that alone.
I don't like these prices, but as much as I use my phone (and you and many others too likely) for more than just phone calls, I can justify the expense.