This wasn't a matter of penny-pinching. At the time, there were very few MCUs suitable for Harmony. The one we chose was the only one fast enough to work and cheap enough so it could be used for Melody boards (which I do not profit on.) With any project, economy of scale keeps costs down, so the ability to produce a board that would work as Melody and as a base to create Harmony worked together to keep costs reasonable.
And what is really the doubled cost of the board?
As said, there were some chips that had more memory but were too slow. There were faster chips with enough memory but these cost 5-10 times more (and this is no exaggeration.)
There are several ways to design a multicart and I could have used one of these chips, or used a conventional hardware approach like the Kroko cart and it could play BD, but chances are it would have cost twice what Harmony does (at the time.)
Since Harmony was designed, there are new chips out, one of which will be used in H2 (and will play BD with no problem) but this chip costs four times what Harmony's chip does, and as such no "7800 Melody" will be made, and these will be purchased and produced in small quantities, which increases prices more. I've done as much future-proofing as is reasonable with H2 but someone may inevitably create something that it doesn't like either. Even these old consoles are a moving target these days and you have to stop somewhere.