I was surprised by this as well -- despite hearing a rumor of it a week ago. I've given it some thought.. It's a common complaint: $100 for flash storage that c

I was surprised by this as well -- despite hearing a rumor of it a week ago. I've given it some thought.. It's a common complaint: $100 for flash storage that costs them a fraction of that. But Apple isn't measuring P/L on a component basis. It's important to Apple's business to maintain margins. Taking down margins would be punished heavily by investors. So this move seems calculated to me to, yes, push more people to the $299 model. And to do that to offset the cost of more expensive components elsewhere in the device. We'll have to wait for a teardown to be sure, but that's my hypothesis.