I don't think the price is an issue. Further, lowering the price removes sales margin and thus an incentive to create it in the first place.
The iphone 12 mini was the first iphone I bought (and the first without keyboard in over a decade), and one of the reasons was that it was one of the most miniaturized phones available. Bigger phones (e.g. fairphone) are cheaper, but they are harder to handle, especially with one hand, and thus I would be inclined to pay less for them. A phone to me is a device that is primarily used on the go, while walking, shopping, working out, hiking etc.
Anything slightly bigger and still mobile, I use my ipad. Then my MacBook. And at home I have my workstation anyway with multiple 4k and 2k screens if I really need to do stuff.
Battery size doesn't matter that much to me. Smartphones don't last long anyway, a bigger phone is not going to give me 1 or 2 weeks of battery life like in the olden days. And whenever I'm out of the house for more than a couple of hours, I carry a bag with me anyway that can hold a charger and/or a power pack. Switching to 4G (5G uses power and is only needed in access point mode for me) and low power mode, the mini has more than enough battery life.
I'd be happy to have a mini every 2 or 3 years. One of the big upsides for using apple phone is the long software support they come with. Spare parts are also available (even though costly).
One last thing: the mini to me isn't actually mini. It is bigger than the Blackberry Q10, which was my favourite phone of the last decade. With the missing keyboard, it features quite a big screen size. I can even read ebooks in public transport comfortably while standing.