Are we any better than any Chinese copycat, from an ethics point of view? Answer on a postcard...
Maybe not. But if I own it, I should be able to do whatever I want with it. That's the law where I live.
I can sort of understand the desire to sell a spread of products. That way you'll get more customers. But selling the same product, just artificially dumbed-down, feels unethical to me. I am getting a device that has limitations meaning I can't utilize its potential. But that amount of utilization potential can't be of use to anybody else either, it is just wasted. They did not spend LESS on building it, they did not consume less of our finite resources building it, they just made it suck. That is immoral.
The practice of selling selected components is another thing. Sometimes you need that extra. Sometimes the design is so forgiving you can make do with pretty much any component within the same order of magnitude. Giving the designer / customer the option of better performance, while selling those that did not meet the utmost demands at a lower price, makes sense. Less waste, more options.
Of course the movement of functions and capabilities into software complicates this. When the difference between "basic" and "cool" is just code, what to do?
Side note on HW functions becoming software:
Every day at work I have to endure HW vendors staggering into becoming software companies with various amounts of luck. A special corporate case of "Beware of the EE with a compiler!" (and the corollary "Beware of the programmer with a screwdriver!") that usually is a clusterfuck of epical proportions. Case in point: Security in industrial and domestic automation and control systems. QED.