I think they developed this during the years where all the nvidia hardware was gobbled up by crypto miners. The resulting pricing probably did not help either.
Tesla is big enough that they can afford to experiment a little. This sounds like an experiment that actually worked. Once they had it working, doing more of it and iterating on it is just business as usual for them.
The self-driving AI they use this chip for appears to be less than impressive from my perspective. Its mistakes seem to come up in the news quite frequently.
Are you aware of a better implementation though? It might not be perfect; it's still miles ahead of competing systems. Yes, it makes mistakes. But that's a rather poor argument to dismiss the whole strategy and technology.
From my point of view, Tesla is converging on good enough more rapidly than anyone else in the industry. Courtesy of their AI strategy and technology; including the in house developed chips.
This is a big problem, though. Any ADAS is a safety critical system and while "good enough" can help push volumes, it is extremely bad from safety perspective. If you really want to read on this u/adamjosephcook/ has some awesome writing going into far deeper detail than I could explaining this particular issue.
Tesla is big enough that they can afford to experiment a little. This sounds like an experiment that actually worked. Once they had it working, doing more of it and iterating on it is just business as usual for them.