Can't edit, but apparently Steve Jobs explicitly positioned the iPod Shuffle the way I described above [1]. Unless Apple has a similar single-function, low-cost, easy-to-manage device to take the Shuffle's spot in the lineup, that can be positioned towards young (age 4+, say), they're discontinuing the Shuffle and leaving a gap in their product ecosystem story, at a time when Chrome is making huge inroads to their traditional education-institution-based markets that reach children. Losing the cognitive and top-of-mind attention of children weakens their grip when they grow older and make/influence purchasing decisions of more expensive devices like smartphones today, who knows what device in the future.

[1] https://www.wired.com/story/requiem-for-the-ipod-shuffle/