If this is true, they are competing with pricing on the Steamdeck and the ROG Ally and taking them as serious competition. If the OG Switch is going to continue to receive support through the eShop while the Switch2 ramps up, the pricing makes sense IMHO. But the question begs, if its 399 for a complete setup what about a 'console only' release so existing switch owners only need to upgrade the core system and keep the accessories? Assuming things like the JoyCons will work with the new revision.
If Nintendo keeps a closed ecosystem going as they have with the current switch, I can't honestly say I will be buying a switch2 over an Ally at this point. Even at the 150-250 additional cost. Having the ability to connect to my gaming PC from the switch(CFW) has been an absolute game changer for all sorts of things, having access to a functioning browser, netflix, disney+, and Hulu(already part of the ecosystem) is a must have moving forward or I am just not interested in continuing with Nintendo past the OG swtich.