If they can't stand to offer the thing they already sold at a price they already got paid then maybe they should charge more.
This, I think, is the crux of the matter.
Yes, they could just offer one model, at a price point somewhere between the two different models. However, now some customers who were happy with the lower-end model are priced entirely out of the market, which is bad both for those customers and the seller. Balancing that, customers for the higher-end version have paid less (good for them) and some new customers will have entered the market because the new features/price-point is attractive to them (good for them and the seller).
It's not obvious which of these will dominate (so whether everyone is net better off or not), but in the absence of any hard data relying on the self-interest of the seller to maximise their own benefit seems reasonable here.
This, I think, is the crux of the matter.
Yes, they could just offer one model, at a price point somewhere between the two different models. However, now some customers who were happy with the lower-end model are priced entirely out of the market, which is bad both for those customers and the seller. Balancing that, customers for the higher-end version have paid less (good for them) and some new customers will have entered the market because the new features/price-point is attractive to them (good for them and the seller).
It's not obvious which of these will dominate (so whether everyone is net better off or not), but in the absence of any hard data relying on the self-interest of the seller to maximise their own benefit seems reasonable here.