I think the 256gb storage is an even bigger letdown, esp because small SSDs are slower and the swap writes will likely be focussed to a smaller area, increasing the degradation speed even further.
All in all, 16gb/512 should have been the default a long time ago but why do it when you can sell it for an additional $500
I'm a dev and have a base model m1, it never slowed down, if it's enough for my use it's probably enough for the millions of people who buy it to browse reddit and watch netflix. It's the base model of their entry level laptop, back in the days a macbook air would barely be enough to browse the web
All in all, 16gb/512 should have been the default a long time ago but why do it when you can sell it for an additional $500