Spec-wise, this is as good as an M1-M2 Air, which is already an over-powered device for most non-professionals. All the "compromises" they made, like no center stage in the camera, less ports, only one monitor support, "just WiFi 6E", and others, are all non-issues for a typical average consumers.
And the price is the best it could be. At $499 for students, in a year's time when Gen2 is released, you will find a new Gen1 at possibly $399, and a refurbished Gen1 at even less. I don't see why anyone who wants an "entry-level/starter laptop" would buy anything but a Neo. We already are in a world in which average people don't need specific Windows-only apps. Most common apps are either cross-platform or web-based.
Dell, HP and alike are lucky that they're being enamored with datacenter server demand. I expect them to shift-away from the consumer laptop market and focus more on the enterprise in the coming years, which could have negative consequences for their pro-lineups.