I believe there is a strong market out there for a low-level Linux capable controller with WiFi, Ethernet, USB host, etc, capabilities. The USB itself would be especially killer - imagine being able to just load the appropriate kernel driver for a USB device and being able to communicate with it directly.
[1] https://en.wikipedia.org/wiki/ESP32#ESP32-P4_-_January_2023
[2] https://esp32.com/viewtopic.php?t=45499
[3] https://www.reddit.com/r/esp32/comments/1ilyjpe/when_will_th...
I maintain a few devices at home, both Linux and non-Linux, and the non-Linux are just so much nicer from operation perspective. Everything is described by a few files checked into git, and there is literally no way to sneak any other state in. If the device breaks, or I want another one, or I want to see what changed, it's just a few text files to examine.
Compare it with typical Raspberry Pi, which started with huge microsd image, then there were unknown "apt-get install"'s and some system files modified... Unless you are very, very good with documentation, each one is a special snowflake. The best you can do is to run backup script on them, and restore on rebuild, but it's much worse experience than having a single "pio run -t upload" in the git repo.
(I know there are ways to create immutable Linux system and push it from main PC, just like with microcontrollers - but this is not very well documented path. And much bigger size of the Linux system makes this impractical for rapid iteration)
I think USB device drivers are the _only_ reason to run Linux on the small device. If you don't need those, keep away from Linux. (not that ESP32-P4 would be any good on it - the spec mention "768 KiB SRAM", which is laughably small for Linux. And putting PSRAM on board will make it as expensive as other Linux computers)