So this is an example of being careful what you wish for.
Neil Gorsuch's mother had to resign in disgrace as the EPA administrator under Reagan in a case that ultimately became what was called "Chevron deference" [1]. Chevron deference meant that when Congress wrote ambiguous statutes, courts would defer to the interpretation of the agencies responsible for enforcing them. Almost 40 years of laws were written with this standard in mind. Critics claimed Congress should be explicit but they know this is bullshit. Congress simply doesn't have the bandwidth to pass a law every time an agency wants to change a regulation and they know it. This is all about deregulation so companies are free to poison the air and water without fear of prosecution or lawsuits. It would allow, for example, a Federal circuit judge in Amarillo, Texas to issue a nationawide injunction on pretty much anything where before Federal judges had to defer to agencies.
It has been Gorsuch's life mission to avenge his mother's humiliation. Overturning Chevron became a mission of the conservative movement and they finally succeeded in a case called Loper Bright [2]. As an aside, Gorsuch really should've recused himself from the case. A consequence of that was that the Supreme Court accepted an interpretation that executive agencies should be government by the Administrative Procedures Act ("APA") instead. So that's been the law of the land since Loper Bright. That creates a number of problems:
1. To change an agency rule now requires a complicated process unde rthe APA of proposing a rule change, getting public comment and generally following a statutory procedure. This administration that wanted Chevron overturned never does that. So under Chevron they probably could've done that. Now? Any memo like this can be challenged for failing to follow procedure. There have been cases where USCIS has had temporary injunctions imposed on them for this reason: the judges are saying USCIS is likely to lose; and
2. This memo is relying on a Supreme Court case that considered adjustment-of-status ("AoS") an act of "grace". Well, that precedent was set under Chevron. Chevron no longer applies. So which is it? Do you want Chevron deference or don't you? You can't have it both ways;
3. Millions of people have open cases under the previous rules and interpretations. Courts are likely to take a dim view of a retroactive rule change like this. New cases filed after this memo was released may not enjoy the same protections; and
4. There are people who cannot or should not leave the US to consular process. They may have incurred unlawful presence that will then get them a 3 or 10 year bar from returning. This bar may well apply if they have to consular process instead of do an AoS. Some people may not be able to leave (eg asylees). The wait time to get an interview at a local embassy or consulate varies wildly. In some cases it's already more than 12 months. If you add over a million current AoS cases to that, the wait times are going to explode. But the cruelty is the point.
Also, decisions by consular officials have very limited ability to be challenged in court. That's also the point.
This will be challenged in court. I think it will make it up to the Supreme Court as early as the next term and this court more than any probably in history bends over backwards to let the president do whatever he wants.
[1]: https://en.wikipedia.org/wiki/Chevron_U.S.A.,_Inc._v._Natura....
[2]: https://en.wikipedia.org/wiki/Loper_Bright_Enterprises_v._Ra...