If pricing on the S had remained similar wouldn't they have an even bigger drop in S sales on their hands?
At this level an S seems like a somewhat logical step up for someone who can afford a M3P but isn't in love with the styling or interior, or just likes a bigger car.
I think the sales would have stayed about the same but if they were less they would have still made more margin which would have greatly helped their overall margins. They also removed the lower end battery models on the Model S which is also a mistake in my opinion. There was a market for the Model S with a 70 or 75 battery.