Eh... I don't think so really.

Depends on their objective. A PS5 sale is more valuable to them than a PS4 sale, because the PS5 owner will probably generate more revenue for them in the long run. Selling more systems isn't necessarily their goal. And even at 200/250 I don't see the PS4 being a very attractive proposition because of the 300 dollar XBox Series S and Swtich.

The PS2 had a lot of success post PS3 but that was a different market, and Sony was launching the PS3 at a very high price to the point where a cheap PS2 wasn't going to influence it. I can see Sony just letting hardware sales drop quickly.

Nah, they needed to drop the price yesterday.

And PS4 sales dropped by a whopping 1% in August in the US. I'm pretty sure it has held up well outside of Japan, where sales are a disaster.

I've been preaching the $199, $299, $399, $499 ladder for a while now.

Worthy possibilities above, but how about another.

SNY drops PS4, reduces Pro to $249 and compares it to XBSS. 8 Cores, 4.2TF, 1TB. The big factors pushed to casuals. $50 less than XBSS and plays some next/cross gen games for a few years.

PS4 Pro will likely get discontinued in the next few months. It might get an official price cut down to $250-$300 to get rid of existing stock. PS4 Slim will either stay the main PS4 and be priced around $200 or we might get a PS4 Super Slim (All-Digital) for that price.
But I agree. Considering that Sony announced several PS5 first-party titles are going to be on PS4, might as well drop the price. Demand for PS4 isn't high anymore, but I think demand would be higher if it was $200, and that would be a great option to market with new Sony titles.

well but with 99% of PS4 games working on PS5 and PS+ being a thing it could be worth it to provide an ultra cheap option that's in impulse buy territory to get people locked into their ecosystem.  Even if it only results in PS5 sales years later it's still worth it for them.  Those cheap buyers are then more likely to get a PS5 when it is cheaper.

But what’s the best way to compare it performance?

its tracking around 3 million units more than PS3 back in 2013 with a higher price point.

Sony didn’t reveal their forecast for either PS4/ps5 for FY 2020 so maybe they have plans to lower the price.

Actually, what if Pro (Slim?) was reduced to $299, with it's 8 cores, 4.2TF, but uses a 2.5" 1TB SSD instead of an HDD? Could they better compete with XBSS for a few years that way?

If Sony drops price on PS4/Pro at this point, it wouldn't be aimed at "core" markets as much as global markets with less personal income to spend.
Honestly I might wonder about the case for a discless PS4/Pro which presumably would have similar payoff in terms of online sales VS disc retail.
I don't really see Sony interested in two separate PS4 skus though, so they would have to decide between base and Pro spec, and would need to
re-engineer either for new APU process and so forth in order to minimize costs to make it worthwhile. Not sure if this is big priority, even if legit.
Probably more impactful is some sort of installment/lease like MS is doing, and ironically I believe Sony still owns it's own bank in Japan,
so that sort of business shouldn't be anything new for them, even if if theywould still rope in 3rd party bank (like MS is doing) as funding partner.

please drop that price, my Vader PS4 is on it's last legs. USB's don't work (so if the two controllers I have paired to it go ... it becomes a brick). The disk drive got fed a plastic star by the toddler and sounds like hell (sometimes have to put a game in several times before it will read). I would snap up a cheap one in a heartbeat.

That's a viable strategy. Personally, I don't know to what extent people are locked into the ecosystem. I had a 360 (I also had a PS3 but I only had a few games for it and it broke) but that really didn't factor into my decision to buy a PS4, because if I wanted to play the older games I still had the hardware. It may be a little different if there's something like PSPlus where the games are tied to an account, but I still don't know. 

Really comes down to how many of those late gen adopters they think will remain with the brand and how many of them could be persuaded to buy a PS5 instead.