Very interesting discussion here about technical details. However, technicalities aside, I think it is pretty obvious that K-500 is made NOT TO SELL. It should serve as a reference for comparisons, to have consumers look at it and then notice/try K-50 with just a few extra features for a few bucks more. The trick is, for an average consumer the biggest step it to decide to spend any money on a particular product. Once there, it is quite easy to decide to spend a little bit more. Happened to all of us many times, from ice cream and candies, to cars and houses.
In other words, K-500 primarily exists to maximize K-50 sales. If a few K-500s sell as well, not bad. Note that K-500 is zero risk to produce: the only real manufacturing difference is painting the model number - that is the only tool on the whole assembly line that is specific to each model!!! The rest is accomplished simply by skipping some steps during the assembly process and firmware configuration.
(Which bring us to the next interesting detail: why no gazillion color combinations for K-500? Well, notice that K-500 and K-50 model names have to be printed on those colorful plastic shells. But if K-500 full rainbow palette does not sell, which is the intent as mentioned, they'll have to throw shells away! Thus, print name labels onto full palette of something that is expected to sell: K-50!)
To understand what Pentax Ricoh is trying to do, I would highly recommend the following TED talk by Dan Gilbert:
Also, on a similar topic, good read is "Predictably Irrational: The Hidden Forces That Shape Our Decisions" by Dan Ariely:
Predictably Irrational - Wikipedia, the free encyclopedia
So stay calm, everything is under control: Pentax is trying to become Canon!