I really don't think this is anti-selling Model 3, otherwise they should have thrown in the most optioned Model 3 (like P and D versions with even smaller f/trunk space, and the 75kWh option) for a fair comparison. I better believe this is to differentiate their products and tell everyone Tesla is not selling only expensive cars or fast cars any more!
Come to the $35K base price for Model 3, I believe Tesla has spent the most time and effort on this and driven hard on its suppliers. Every component will be cheaper and inferior than Model S, everything, including body/frame material, computer hardware and software, roof, trunk lids, tires and wheels, steering wheel, all automatic adjustable amenities functions, motors and powertrains, warranties, headlamps, sensors, airbags, interior furnishing, A/C, sound insulation, suspension, audio system, and brakes, and even Tesla reduces the profit margin to zero and rely much on upselling essential packages like ADAS/TACC/AEB for your tax credit money. There could even be a small incentive if you opt out any AP hardware or cannot live with a beta software.
People who want and can afford Model S will stay with Model S, they won't look at Model 3. Model 3 will look cool in a couple weeks, but it could soon become leaves or roaches many on the street.
It is really for product differentiation. On the bright side.