It's a awful decision and one that will cost them market share.
Not necessarily. Currently Xbox X starts to be readily available since a few weeks, while S was always on stock since launch, even always on sale at first iirc 5%, for a long time even 10% off. PS5 on the other hand never was on stock anywhere here. Those who were willing to pay scalper prices might now even pay less, since the demand might change and the market for scalping might not be worth the effort anymore. It gets more expensive but here PS5 is more sought after than X or S. Seems like only US and UK are markets were Sony is in a real fight. But as long as supply is still smaller than demand, no stock at all, Sony can't lose anything!
I would have expected that step much earlier, now it actually seems late since there were already some internal hw revisions which should have cut at least some costs. PR wise it is an awful move, right when demand and supply seems to be getting at least closer, whereas earlier it might have been a little more accepted when scalpers asked for almost twice the price.