I'm not going to argue your position because it's all opinion. However, I firmly believe that Sony, to sell 15M units on revision 1 of the SoC, with a Microsoft console released at the same time, plus a world pandemic with Covid, and lastly PC refreshes.. was not only ignorant, but downright stupid. This is why they had to decrease production.
¯\_(ツ)_/¯
For all of 2020, every console made has been sold, near as I can tell from trying to buy them myself. Despite looming refreshes.
In my mind, Sony was aggressive because the stakes are huge. Let's say by the end of Q1 both MS and Sony have sold every console they could build.
If Sony has 2x the consoles in the wild - not mention their clear demarcation in generations - they will be well on their way to holding the same advantage in the next generation as they have in this one.
I haven't really seen the numbers that MS has been expecting to build, but it seems much lower Sony's position. The S is also a much smaller console in terms of how much silicon it requires, so I guess we'll just have to see how it plays out.
Each console refresh seems to be a moment in time (6-12 months) where the next several years of revenue are built upon and can be nearly life or death. I have zero problems with Sony being very aggressive on this front. Worst case they have too much product and low liquidity in 2021? The downside of that seems small compared with what flipping sales positions with MS might mean.