Its probably that in 1 or 2 years local (free) models will completely take the place of cheap models so cheap models need to move up the quality chain.
You have free local models for most tasks, $20 subscriptions for near-frontier intelligence, and API per token costs for frontier intelligence.
Flash seems to be targeting the near-frontier category.
That might work if it wasn't for FOMO. Are you ok with only $20 of frontier usage a month?
Subjective, but if we compare to compute not everyone needs the most expensive laptops or super computers for their work.
I think frontier models will be invaluable for scientific research, defense, financial analysis and such. But the average person probably would be reasonably well-served with a local model.
If you're in sales, customer service, product management and such - the leading open models at the 30B mark are already good enough.