The cheapest flash microcontroller you can buy is actually an Arm Cortex-M0+

Here are a couple of factors.

* As other mentioned just like code golfing, minimizing size, cost, resource usage can be valid ways to make hobby project more interesting. I remember having a lot of fun during high school trying to squeeze in code for the project into micro with 1k memory and the whole device into matchbox.

* Not everyone is a silicon valley programmer with 100k salary. While cost of food and other living expenses is mostly also lower in the rest of world, the relative cost of various electronic gadgets and other things for hobbies is a lot more fixed. And with 50x price difference even at small quantities, you will always find some part of world where one side is affordable, but other side if not expensive then at least something that's not cheap anymore and you wouldn't want to waste too many times.

* When you make are hobby project you don't just buy single piece of each component. You buy at least 2-3 in case you mess up, so that you can try again. Especially for highschooler or student difference between $0.13 and $35=$15 can difference between something that is still throwaway and something you would think twice whether you are getting the right thing. Add 2-3 iterations and that $15 becomes $45.

* Just because it's a hobby project doesn't mean it contains single submodule. If you are making a grid of modular things, having a matrix of 10x10 is still cheap with a 0.1 micro, but 500$ is already serious money for a hobby project. You don't need to be mass manufacturing for 50x price difference to matter. Having a small cheap option, opens opportunity for new kind of projects.

* Some people mentioned the time cost of time factor, and that 5$ difference isn't worth it means spending more time. I disagree. The fact that you are doing a hardware hobby project already means that you are wasting time. If you only cared about end result in many cases it would be more efficient to just buy off the shelf product. In many cases the whole point of hobby is to waste time in enjoyable way and it doesn't matter if project is finished in 1 week or 2. And if you can learn more, by solving interesting problems during a process, doing things the hard way is a benefit not a downside.

* A lot of projects could be made even simpler and cheaper (if you take into account cost of development time). If you instead of replacing 0.1$ micro with 5$, replaced whole thing with 100 line python script running on a computer with screen. You can make a lot more impressive visual things on a computer, than blinky LED widgets. But it's so easy it's not fun anymore (there are plenty of fun with computer graphics but it's a completely different kind of thing). Similar thing with people messing with pen plotters. Just pressing print on inkjet printer will produce much better results much faster. People are still making their own CPUs from relays, transistors or logic blocks in computer games, even though

* People have different interests and they can find different aspects of process enjoyable. interesting. It can even vary between projects what challenges the person wants to focus on, and which ones they choose to skip by spending more money.

I'm looking for a cheap ARM MCU with I2S support and one that I found was a Chinese part from GigaDevices which is $0.50.

On the other hand, lots of software is written for STM devices so spending a couple of bucks more for their parts will save you development costs and time.

    Yes, the cheapest option will probably have more issues then the more
    expensive one. But that's actually good, because if I can't deal with them,
    I probably would give up with a more expensive one.

I don't see how that follows. A cheap electronic component is much more likely to be out of specification, requiring hacks or workarounds to deal with the fact that it's out of spec. A more expensive component is more likely to be within its advertised specifications, and thus Just Work™, when used in a design. It seems to me that using the cheapest, bottom of the barrel, dodgiest components is a recipe for more frustration, and thus more likely to lead to giving up than using components that are modestly more expensive, but actually work to the standards which are advertised.

I read today that 8% of US good consumption is from China.

It was an interesting read for me, as I build professional boards from scratch using LPC and STM series chips at work, and so have the tooling to play around with cheapy things like this on a DIY hobby basis. I usually don't like to go with the pre-built SoC boards because they do it differently than I like, and since I have the resources to do it my way, I can.