I expect they did the math, and found that overall cost was less, even with reduced thrust/watt efficiency, reduced thruster life and increased tankage and solar string mass. The cost of xenon is huge, and supply is very constrained. When NASA builds a craft, they have to stretch their fuel purchase over several years. SpaceX probably can't afford to wait that long or spend that much. They may use xenon for a longer-lived, more slowly deployed second generation satellite.
- How much of the world's xenon supply has been used in spaceflight altogether? What's the total kilogramage sent above the karman line?
- Is it a lot? Does spaceflight make a dent in the amount of available xenon in the world?
- Did it cost a lot? Did NASA take out a mortgage in order to pay for its xenon, "stretch(ing) their fuel purchases over several years"?
Related and sources available in both posts and in comments; good info and links regarding the economics of xenon in spaceflight:
- Delta-V of Starlink Satellites (my answer there is going to be revised shortly as Starlink deploy altitude has evolved)
- Why might krypton have a lower utilization fraction than xenon for ion propulsion, and what can be done to improve it?
- What performance specification would be lower for Krypton than for Xenon in Hall effect thrusters?
- Why will Starlink satellites use krypton instead of xenon for electric propulsion?