They are a very profitable company
That's certainly true, but not enough that they can afford to have Elite Dangerous cost a few million pounds more than it brings in each year on a permanent basis. They're still a company, not a "provision of Elite Dangerous" charity with a side business in profitable games to fund it. It's not about sympathy for them - it's about having reasonable expectations for what a for-profit business will do.
There wouldn't be a cash problem with them developing another Odyssey-scale ED expansion
if they were sure it would be profitable in the long run, because they could easily cross-subsidise it from other games / existing cash reserves, yes. But they do still have to be reasonably confident it'll be profitable in the long run, because they didn't get to be a very profitable company by consistently picking loss-makers. And that means either "every existing semi-regular player is highly likely to buy it at or near full price" or "it'll bring in a very substantial number of new players/returning players" or "it'll sell a ridiculous amount of cosmetics": that was the expectation for Odyssey, and it came a very long way from working out.
Smaller Beyond-scale developments I do expect them to continue with for quite a while because that does and likely will remain profitable for them.
Elite Dangerous is still a very profitable product for them (I would even argue their most profitable)
Nowhere near their most profitable [1] by any conventional measure I can see.
In terms of lifetime profit (revenue - direct costs) Planet Zoo, Planet Coaster and Jurassic 1 are all higher despite being younger.
In terms of just the last year's profit all of those are still higher, plus Jurassic 2 also beats it.
Even in terms of revenue brought in - ignoring costs entirely - Jurassic 1 is still ahead on the lifetime measure, and Jurassic 2 and Planet Zoo are ahead on an "at the same age" measure.
Last 12 months: £2M profit on £6M revenue, which is good for its age but not exactly "very profitable" in absolute terms.
They could make a lot more money from Elite Dangerous but don't maximise their income.
By doing what? What could they plausibly do to get, say, a consistent extra £5 million / year profit from the game so that they can fund permanent development at Horizons/Odyssey levels of staff?
(For scale, that's something like an extra £10/year on average from every existing semi-regular player, or an extra 250-500k sales each year, on top of what they already get)
[1] Source data all from
https://frontier-drupal.s3-eu-west-...rontier_FY23_Interim_Results_presentation.pdf - which is I think the first time they've done a public version of that graph which has included ED at all.