It's definitely a big axing of the options available for purchase, but last year they sold 1,636,129 cars, of which the S, X, and Cybertruck combined were only 50,850 (3.1%). And I'd bet that the majority of those 50K were Cybertrucks. The volume of S and X is just tiny compared to the rest.
I don't think it's "upscale" replacements they need, but upsize. I've driven a Y and it really doesn't feel much bigger than my 3, it's just more upright. Still not much room behind my seat when I'm driving. I'm starting to look at replacements for my wife's Lexus RX350 and while the Y is maybe OK, a 6-seat X would be much better. I don't really want to have to worry about the long-term reliability of the falcon wing door mechanisms though.
I'd love to get away from Tesla, but nobody else is doing it as well as they are. There are some features that I can't imagine not having at this point - At this time of year, the key one is that the cabin can get warmed up from 20ºF to 70ºF in two minutes flat. Even with all of this cold, I haven't worn a coat much this winter (I do keep one in the car for emergencies) because I can just hit the button in the app and walk outside and it's already warm.
I don't know why the other OEMs have been so slow to learn from and copy the things that Tesla has been wildly successful with. I think I would be supremely annoyed by any other car available at this point.