In a certain way, yes. A quick search on Amazon shows I can get a 1TB SD Card for $150-300. However, the rated speeds are in the 100-200 MB/s range rather than the over 2GB/s for Apple's 2020 MacBook Air (never mind the faster speeds of their new MacBook Pros which is 7.4GB/s).

Yes, the $400 that Apple charges to upgrade from 256GB to 1TB is high compared to the $200 for an SD Card. At the same time, the storage is 10-20x faster. I think the storage is different enough that Apple doesn't have to worry too much. Sure, some people might try that strategy and walk around with a laptop with a card sticking out a bit and some third party will make a microSD adapter that doesn't stick out, but I think most users will probably opt to pay for the storage and Apple can ignore the small number that buy niche products.

I think between saving money on their Apple Silicon processors and being in a great place to have serious differentiation between the Air and Pro line, Apple doesn't have to worry.