No, the Steam Deck would have never upgraded to Dragon Crest (2022 on those leaked roadmaps). In case you didn't realize, the Steam Deck wasn't released until Feb 25 2022, and only sold 1M units in 2022 (vs 3M projected in 2023). It's certainly successful enough now (and has enough marketing, like it had just a ridiculous amount of floorspace at TGS) that it's all but guaranteed there will be a Steam Deck 2 (but probably not until 2025).
Since all the details are NDA'd, I guess we'll have to disagree on the economics, but "tweaking CPU/GPU config" is the whole point of AMD's Semi-Custom Solutions group and if they can't handle delivering a solution for a product that has at least $2B in sales, then I don't know what customers they're supposed to serve (tape-out costs are expensive, but not nearly as expensive as you're imagining I suspect, when reusing existing IP blocks). But we can revisit in a few years and see.
Since all the details are NDA'd, I guess we'll have to disagree on the economics, but "tweaking CPU/GPU config" is the whole point of AMD's Semi-Custom Solutions group and if they can't handle delivering a solution for a product that has at least $2B in sales, then I don't know what customers they're supposed to serve (tape-out costs are expensive, but not nearly as expensive as you're imagining I suspect, when reusing existing IP blocks). But we can revisit in a few years and see.