The price is fine. It's supposed to be the Lexus in the line-up, not the Toyota. It's for those who don't mind paying a "premium price" for a luxury product. It was never intended to out-sell the base model.
Honestly, if they just made another console at the same level as the PS4 Pro, it would be an empty gesture. No one would leave the Playstation ecosystem for a side-grade. With this, though, they might pull away a few gamers who value resolution and "power" above everything else.
That brings up an interesting point, but it's not necessarily a great thing for Xbox.
PS4P is enough to run games at upscaled 4K @ 30FPS outside of special situations like racing games and other lightweight stuff.
X1X is enough to run at native 4K @ 30FPS outside of the same special situations.
However, X1X as well as PS4P are hobbled by fairly awful Jaguar CPUs, which will continue the heavy low-FPS in major stuff like Destiny, Wildlands, Shadow of War, almost certainly RDR2, etc.
So the 'power' gamers would be more likely to just go to PC and play at 60FPS+ right?
In that way, a hypothetical $599 X1X that used a Ryzen CPU but otherwise identical, good enough for 4K/60 in basically everything, might have actually been a better move. A slightly better 4K vs. upscaled 4K box is not a real game-changer. At all. When the flood of 4K/30 stuff keeps piling in, it doesn't seem all thaht exciting in the big picture. I'd rather have 1080/60 to be honest if given the choice, but that's not an option because of CPU limitations in many major titles. Small scale FPS and racing along with indies seem to dominate the 60fps spectrum on PS/XB :/