No more embarrassing than nVidia having two RTX 4080s with vastly different specs.
That's because the cheaper one was likely intended to be the 4060 Ti or 4070 until the marketing department decided that they could sell it for more if they called it a 4080. : P
Really though, the 4080 12GB's graphics chip is similar in size to the one used in the 3050 and 3060 (Non-Ti), and less than half the size of the one used in the 3080. Even if the process node is more expensive per wafer, the markup on those things has to be huge, and I can't really see much reason for the massive price increases over the 30-series, aside from Nvidia grasping at maintaining previous crypto-shortage price levels.
And the performance of the 4080 12GB isn't even that good. Judging by Nvidia's own charts, it provides maybe 10-15% more rasterized performance over the $700 3080 in most games, for a nearly 30% higher MSRP. Sure, raytracing performance appears to have improved significantly in games that utilize it, and there will likely be big gains in some other titles as well, but it's been 2 years since those cards came out, and one would expect larger performance gains across the board, especially considering the 30% higher price. Maybe if the 4080 16GB were $900, that might be considered a reasonable price-hike, but this is a completely different card utilizing a different graphics chip that was clearly meant to target a more "mid-range" price level.