Improving on things isn’t a waste of money especially if they’re successful enough to achieve the main goal, ie. make games more accessible to more devices, instead of making the perfect handheld (which is unlikely for a first iteration). The body is too big for the screen, too heavy, new SOC means new considerations internally like cooling and battery, keeping the current form is arguably more stupid since it will probably limit actual improvements.

That concept art is ugly though.

Sony made their bed, and is actually worse by using their market dominance to block 3RD PARTY titles from Xbox.