I think you're seriously underestimating both cost sensitivity, and the degree to which chip packaging evolves.
I worked on a bit of premium consumer electronics. Retail would be about $80. That allowed an electronics BOM cost of $20. When selecting the processor, the size of the flash was a more dominant effect than RAM, clock speed or chip peripherals, because we're in the $1 vs $1.20 region.
There is a lot of software running in some very cheap electronics, all around you all the time. Everyone just forgets because it's all designed in corporations and not talked about on the internet so much.
I worked on a bit of premium consumer electronics. Retail would be about $80. That allowed an electronics BOM cost of $20. When selecting the processor, the size of the flash was a more dominant effect than RAM, clock speed or chip peripherals, because we're in the $1 vs $1.20 region.
There is a lot of software running in some very cheap electronics, all around you all the time. Everyone just forgets because it's all designed in corporations and not talked about on the internet so much.