That strategy works well in a lot of places, but it's not what's going on here. This is just plain old incompetence and mismanagement. It's a mess, rather than a strategy.

For Intel, it just results in most buyers buying the cheapest possible system since there is no way to tell what's what. Intel would make a lot more selling $400 CPUs than $50 CPUs, but to do that, people would need to see the value.