Because it makes them feel ripped off.

Enthusiasts were likely having positive feelings about their purchase of Sennheiser products and now they feel like an idiot. Psychology is a big part of the audio business.

Isn't it a good thing that these companies are offering different price points for people to choose from?

That Sennheiser is taking headphones and expending extra cost to muffle them in order to sell them at a lower price indicates that they do not consider themselves to be in an efficient economic market. Likely they are selling the muffled headphones in order to artificially inflate the price of the normal ones.

It also raises the question of in what other ways Sennheiser might be intentionally degrading the quality of its products.

It's a big part of most businesses; you want the customer to have positive emotions regarding your company/product.

They can pull tricks like this because most people don't care that much about whether their chosen product is better according to some objective measurement. Rather, they care about getting a good deal and being made to feel happy about their purchase.

Unfortunately for Sennheiser, high-end audio customers are probably one group who do care about buying something objectively better. News like this risks hurting their target market substantially, I'd say.

I mean, to me this practice is practically fraudulent when it comes to consumer goods. Yes, it makes business sense to offer product at different price points. You could argue that the higher priced model pays for the R&D that went into developing the headphones. That doesn't change the fact that these are the exact same headphones with a $150 price difference.

Comparing to the software case where you pay more to have features put in that may be disabled in the cheaper version, there is a big difference there. When you buy the more expensive version you know what was taken out, and getting that is what you are paying for. Would anyone buy the more expensive headphones if the box said "unnecessary foam not added"?

It doesn't really matter if the practice actually lets more people use a product, it just feels dirty.

In reality, the economics of the utilitarian physical goods business may sometimes resemble more those of the information business, but it's up to manufacturers to justify that to their customers.

That's not "market partioning" -- that's utter hostility toward your customers.

If the feature differentiation is achieved by taking the premium offering and adding a component to remove functionality, then that feels a lot worse than taking the mid-range offering and adding components to result in the premium one.

Would people feel a lot better if instead they just went and changed the circuitry to produce lower quality sound?

Yes, as long as there was a halfway plausible explanation that it cost less to produce.

Hardware does have a per-unit manufacturing cost, and people expect a more expensive product to cost more to make.

(Also, FWIW, the "$350" headphones are currently $145 on Amazon and the "$200" ones are $85.)

Chip manufacturers actually do sell you a different product when you buy the high performance product, and it's related to chip yields.

I think this question is rooted in a flawed "cost-based" perception of product pricing, which is intuitive and seemingly "fair", but not how the world works. In reality businesses should charge based on the value (perceived or actual) their product brings to their customers.

This is really disappointing. My excellent HD-280s are finally cracking after years of heavy use, and now I have to reconsider doing business with them for a replacement.

And why your company cannot afford to not have them.

Extruding things from plastics (and especially ABS which this appears to be made from) is surprisingly inexact process and one would assume that manufacturing headphones selling for hundreds of dollars requires quite tight tolerances. My assumption is that the foam is there to damp rattling of case that is made from not exactly matched parts (and this is consistent with few posts in the forum which describe sound quality getting worse after removing the foam).

And I don't see why speakers/headphones/whatever can't be differentiated on quality, while having same overall design.

Lower quality speakers are not rejects of high quality speakers, they are just cheaper designs.

As to the mold, the holes there require no tolerances, they are there just to avoid air cushion behind the driver and serve no other purpose. Similarly, a foam pad is a rough hack to reduce its effectiveness, driving the speaker's response down. Do you really feel like this foam cut is some precision fix to tolerances problem?

People who are not given all relevant information before they buy are product can legitimately feel upset.