I have to wonder what the difference in BOM costs there is between 8MB of flash and 2MB of flash? Consumer USB flash prices in the 10+GB range are around 0.05 pennies per MB. Surely at the point, the cost of the enclosure dwarfs the cost of the actual memory for flash chips in the MB range.
It seems like the cost of retooling would far outweigh any cost savings from spinning a new rev with 6MB less flash.
They sell a lot more than just the WRT54 and are terrified that the $250 market (or whatever) will collapse if people start buying low end models and reflashing to gain features.
Its a market segmentation game. They'd gladly pay $5 extra for less memory, if neutering the low end device saves the sale of a high end $200 model.
It seems like the cost of retooling would far outweigh any cost savings from spinning a new rev with 6MB less flash.