Garmin already has long followed this principle. There have a ordinary soup set of Chinese mass consumption chips now.
And GPS receiver is not the main reason that smartphones start to replace handhelds. PDA with comparable Garmin cost had a good receiver earlier. But the operating system has been designed to work with a stylus and a long sequence of complicated menu. A full-size keyboard, a icon based interface and a true multitasking be found even in the cheapest devices today. In other words there is no difference in interface between a PDA and a navi handhelder.
IMHO, all comes back. A navi handhelder become a tool for professionals again. At least I'll feel uncomfortable without Garmin Navi under the right hand that always on and ready to immediate work...
P.S. About difference in cost of Nuvi 30,40,50 and 1xxx. 1xxx is has long been lying in stock. Get rid of such goods by any cost - law for any seller. Money earn only when money in move...
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