While somewhat basic (and non the worse for that IMO), the Honda does not appear to be either "primitive" or small. A Youtube video posted by an early purchaser yesterday (they were only released to purchasers Wednesday this week) suggested an initial rather unvelievable 54 miles per litre consumption over around 120 miles - or approaching 250 mpg ! The owner didn't seem to be able to believe it either, though his video did show the odo reading & him chivvying the pump attendant to put more in to the tank with the pump in view.
I suspect that there would be interest from commuters currently running 125s if the 350 was substantially more fuel efficient and the price was right. Given I could regularly get 90-95 mpg from the NC750S DCT I replaced with the Interceptor, I could see that Honda could get a long stroke 21hp 350 single that appears to top out at around 70mph (though seems capable of running at 60 without effort) to run on a whiff of petrol. While performance overall may not be much higher than a full power 125, 30Nm @ 4000 rpm and 21hp @ 5500rpm would make for a much more relaxing ride.
The market here may be small, as it is somewhat niche, but in India (and my post did mention Honda competing for a slice of RE's traditional home market share) RE have managed to shift over 40,000 350 Bullet variants per month for several years & there were (pre-virus) still waiting times of several months to get one.
Agreed that MotoGB have been more than a bit greedy with the Bullets here, but £3k seems a bit optimistic when Japanese 125s (which are not often made in Japan these days) are more than that - priced closer to the Benelli Imperiale 400's £3700 OTR would seem a bit more realistic. Still seem to be able to sell them, though.