[...] The other option to improve the SS is to up the internal RAM from 10gb to 12gb. As small as that may seem... it's that 2gb difference that is really keeping the SS from running One X enhanced software even though the other specs of the SS exceed the One X considerably. The CPU is better, the GPU is more efficient in 4tf vs the older 6tf of the one X but the area the SS cant make up the difference is the ram. I mean if MS were to utilize virtual memory tricks (using ssd capacity as a portion of extended memory) of the old days, it still doesn't make up for the lack of one x enhanced capabilities that the SS is capable of doing.
I think a RAM and/or GPU upgrade could/should happen in a mid-range SKU. Add in an optical drive and focus on the $399 USD price point. However, because the SSD is expandable (unlike the RAM and GPU), the SSD could theoretically stay at 512 GB in this scenario. The SSD is a huge chunk of the cost of making these systems at this point, so increasing it even a small amount would really work against hitting the $399 price point that Microsoft would absolutely need to meet or beat to make a mid-range SKU make any sense at all. If they can't hit the $399 USD price point, I don't think Microsoft would choose to release it.
The main thing would be communicating to users that the Series S SKU either isn't going away (a super-budget option, or a developing markets version of the Xbox Series line-up, perhaps?) or (if the SKU *does* go away) that support for it isn't disappearing anytime soon. So either a mid-range SKU, or a new entry-level SKU, would either live alongside continued production of the current Series S, or developers would have to be encouraged/required to target the current X|S and not required to also target this new SKU (especially if its horsepower is only marginally improved over the current Series S). There's precedent for that, where Microsoft moderately improved the GPU when going from the One (VCR) to the One S. This might be a more significant change, but it might similarly be something that flies under the radar as far as software support is concerned with games continuing to target the Series X and the original Series S exclusively. Like I said in a previous post, the extra horsepower could be focused on back-compat and/or multitasking improvements in situations where developers don't elect to utilize it.