I think it was an odd decision since Series S is at least on par with X1X, and considering ram and CPU it is much better. But well they must have their reasoning and perhaps fanbase reaction may make they reconsider it.
Partially to help up sell those who have enough to go top tier but aren't necessarily dying to, or those who don't really have the funds but want the best anyway and will just figure that problem out after purchasing.
If you're a consumer who has the funds, who can say to themselves, 'well PS5 DE is only $100 more with added value', then they can also say, 'but then XBSX is also only $100 more than that with even more added value'.
Some consumers will say screw it and just stick with XBSS, and some will talk themselves into going with XBSX. MS wants to entice you to buy their product one way or another, and wants to try and make the XBSS and XBSX user base as equal as possible so pubs/devs can easily justify putting reasonably equal effort into both consoles capabilities.