I definitely think EK is simply differentiating their product. In the end it is business class. Does it really need all the luxuries first has to offer? I think a lot of other carriers are getting carried away with business and many don't have first cabins so there's no higher bar.
It's a suitable and significant step up from Y, while leaving room for improvement towards F. Does it compete with other business products? No. Maybe EK is trying to arrest the "arms race" of airline hard products and in the end I doubt there's a real danger of people stopping flying with EK because of this. Most pax don't make travel decisions based on the configuration of the business cabin.