As he says in the video, the imbalance is an inevitable result of the design of the action, and basically unfixable.
I don't think they did this because of cost-cutting though, since they seem to have put some actual design efforts into it, but rather a genuine attempt at making a very small form factor piano. Also, they're not even the cheapest around either.
So I don't agree it's part of a race to the bottom per se, but more likely an attempt to differentiate (on size) in a highly saturated part of the market. Some people (without any musical training and having done no market research) may just like the smaller size, thinking this could be an excellent starter piano for their children, for example. Obviously helped along by the friendly salesperson.