Well, thats quite a lot of money. However, lets not forget this isnt your typical purchase at console launch. I think it will take a couple of years until you might get the feeling that you need to upgrade your Series X from 1TB to 2TB. And after all that time has passed, 200 bucks seems like a fair investment, i think. Remember this isnt a PS2 Memory Card. It might look like one but this is actually a very fast modern SSD with lots of storage. These things dont come cheap.
Regarding Series S... i think the type of person who buys an SS wont be buying such an expensive SSD on top of it. Would make more sense to buy an Series X instead. But somewhere down the line, this could be a valuable purchase for them as well.