There is nothing wrong with using the base model as is without upgrading RAM or getting a SSD. Sure, it's only got 4GB of ram and a 500GB HDD, but that's fine for a wide range of uses.
Don't forget a second PC at home can always stream your primary desktop so there is little point to getting multiple high end computers for personal use. Leaving things like a secondary computer for guests or streaming music / video and some light surfing. Making cheap, light, quiet, and low power far more important than a quad cores or a high end video card.
I doubt it. It's just the "bad low-end model" strategy that Apple has used for a long time. You make the base model cheap, but give it some flaws that knowledgeable buyers just can't ignore. This might be a slow processor, or a slow HDD, or not enough RAM. Then you make it so the base model can't be upgraded easily. The "cheap" buyer still buys the base model, but other buyers go up-model and you make more money off of them.
Apple isn't one monolithic creature. I'm assuming that some are trying to kill it (by making it underpowered with low sales) because they can't kill it politically (it's one of Steve's babies.)
It's kinda like the old iPod. They kept making it _long_ after nobody bought one, because it was the iconic turn-around device for Apple. Cook admitted they had to stop making it because they couldn't find parts anymore.
Look at what happens when you give the 1.4 Ghz model 8 GB Ram and a fusion drive, it costs $850.
If you take the 2.6 Ghz model, you end up with $900 for that configuration. A 50$ price difference for a 1.4 vs 2.6 Ghz processor.
The Mac Mini performance and pricing is just maddening.