Chances are if you care anything about ray tracing and the rest of the stuff you already know which box to buy, so it's only a mistake to ppl that subscribe to Digital Foundry and this guy.
For everyone else that wants a basic next gen experience, it's fine enough.
It's on the game dev's.
He literally said "I know it's up to this" and then goes on about why he's concerned.
The cheaper PS5 having the same hardware as the base model minus the drive more than likely means devs will cater to the higher spec boxes.
Which means the S would show its limitations pretty early in the generation, he's not wrong. You're probably talking a 360 vs PS3 multiplat difference where third parties just didn't care to work on PS3.
But like I said before, the type of people that are attracted to the S won't care about these differences.