Two months ago I bought a M4 Mini w/16GB and 512GB HDD for $599. Granted they're up to $799 right now, but a Rpi is now $350 when they used to be $35?

You're correct; they've jumped the shark.

I really don't know who this is targeted at. As a development board these are extremely expensive and as a mini computer you're far better off with something N100 based or similar.

What market is this trying to compete in?

This is because on a COGs basis it is memory with a side of compute.

Pi hasn't been a hobbyist computer since they were prioritised for large-volume business purchasers during COVID.

As for the education market, that's a long forgotten pipedream.

Hobbyists spend shittons of money on their hobbies. A drawer full of raspberry pis is nothing.

I think you're overlooking the 16GB part, it's a niche of a niche device... 1GB is still $50

Search Aliexpress for ESP32-C3 Development Board for Arduino