In fairness, 4.7 inches is now a very small phone. So small in fact that you have basically no options that small in the Android line, and no recent iPhones that small either, if I'm not mistaken.
As a lifelong Android user, I'm very grateful that this exists. I detest just about everything about the Apple ecosystem and dislike the design of most of their products I've tried, but I will be getting an SE next time I have to get a new phone unless Android has responded, simply because that's the only way to get a quality phone that small. Even if it means giving up Firefox, for example.
You don't have to "give up" Firefox, per se. I use Firefox and "Firefox Focus" every day from my iPhone X. Sure, Firefox doesn't use Gecko on Mobile, but a ton of core Firefox features work great: Sync, Send Tab to Device, AirDrop, etc.
You have to look at the physical dimensions though. A 4.7 display edge-to-edge would be truly compact, but this one has a huge bezel so it's closer in size to the flagships and not really compact.
It's called an investment because they make more money on something than they put into it. That money is coming from you.
COVID-19 means that in the coming year a lot of people will have a lot less money to spend, not exactly the best time to cater to the luxury $1000+ phone sector branding yourself with exclusivity.
The problem there is that they can't get the smaller form factor, +nice specs, at that low price but at a higher price it would probably not sell as good because the SE line always had that air of "more affordable iPhone" to it.
That why this new SE is exactly iPhone 8 dimensions, to a point where Apple even confirmed that iPhone 8 cases will be compatible with the new SE.
So it stands to reason that they retooled a lot of their 4.7-inch production to make this "SE" as affordable as it is.
Trying to put all of that into a 4-inch screen form factor like the original SE, would require sourcing completely different parts, require much more retooling of already existing manufacturing processes, for many parts, there'd be zero overlaps with their other products.
So while people like me prioritize the 4-inch screen smaller form-factor, Apple chose to embrace the SE as a "budget iPhone" brand that makes all the other "budget" competition look like really outdated and lame ducks.
Which is most certainly a bigger market than people prioritizing size of the device over anything else.