I didn't say that without AWD and turbo V6, ES wouldn't be a legitimate luxury vehicle. I just said that would help close the gap left by the GS.
In reality, some shoppers will look at ES as "nice enough," "big enough," and "luxurious enough" now that it is the size of the LS and probably just opt for ES since it's going to be half the price. You can tell me that sounds crazy but it is now as big as LS (actually bigger) and offers very nice tech and luxury features. Same steering wheel, same 12.3" screen, rear seat amenities, etc. I don't think this will be as much of a problem for 740i and S450 as it will be for LS shoppers. I definitely agree that there is an LS customer who just wants an LS - the best that Lexus offers. I also think there is an LS shopper who was buying it before because it had the largest rear seat, nice features and was very comfortable. Now, ES is larger and more comfortable inside than LS. It will steal some sales from LS because of this for sure.
You can say this is extreme, but ES has already killed GS based on size/pricing/packaging. It is now even larger and more luxurious than before, which is not good for LS. Perhaps LS' newfound sporty personality will help differentiate it and bring in some new buyers who will offset those Lexus loyalists who will choose ES. Overall, Lexus is shaking up their entire passenger car portfolio between LS, ES, GS elimination and likelihood that IS becomes larger.
As
@ssun30 mentioned before, ES and RX are both category killers because they hit on all the right points for shoppers and cost lest because of scale to produce them alongside Toyota products. Only problem for Lexus is when what gets killed is their own lineup. Of course, you will say this is not a problem at all.