Rich & Cocker have it right.
S gauge/scale is a limited market. I thought of going "S" over 10 years ago because they were "Goldilocks Scale" (not to big, not to small), but the choice was very limited and the old stuff at shows were old Northerns that needed a ton of work, had no electronics, cost $200 plus and would have cost another $200 plus to make useable. I had to leave O scale, because the price (usually in the $1,000s) was beyond my reach and unless you have 2,500 square feet for a layout, impractical. HO was fun, but finicky and unless you are in a large club, DCC is very expensive and tech oriented.
I think Lionel did a great thing producing a steam engine that has great crawling speed, remote control, sound and is scale for mid $300. More people, like me, who were sitting on the fence will come over to S and enlarge the market, then with higher volume, manufacturers will be encouraged to offer more variety and features which would result in the need for spare/repo parts to grow which would enlarge the hobby further.
If the manufacturers can not make product that sells and is reasonably priced, either they won't make things, or the consumer won't buy. That's economics 101.
By the way, there is nothing stopping anyone from upgrading their model to their own taste level.
All I can say is, keep up the GREAT WORK LIONEL! Some of us appreciate your efforts in S.
Francine