There's market for small models with large context, for cases where there’s little need for reasoning (summarization, searching etc). 4o-mini is probably better and cheaper to run than 3.5.

It means they don't want anyone releasing much stronger models then they do or they will undercut you by 1 magnitude and out perform you by 5%. Hardly a recipe for long-term consumer benefit.

Or it means that the existing models are too large to be profitable even at scale.