What you describe is a business decision.
Different products exist at different price points to cater to different customers.
If you want to sell a subsidized product with the implication that there will be ads, that’s one business strategy, but to say that it’s not viable to have a higher end product that will not sell the user data because it’s not commercially viable is something I’ll have disagree with.
Computer monitors with no smart features wouldn’t viable if that was the case.
It’s a business decision, but one of the options won’t move enough units to keep Wal-Mart and Target and Costco and Best Buy using shelf space for your product, and the other might.