They might want people to take their deposits back because perhaps the only people that will be invited to order the 35k Model 3 are reservation holders... Since it wont be nearly as profitable as a car with more features/larger battery, one would assume they don't have a strong desire to sell them to every tom, dick, and harry...
Elon Musk stated that the goal was to move forward sustainable transportation. They didn't state that it was exclusive or tied specifically to higher-priced cars. The entire enterprise is valued at being able to serve down-market at-volume, with profit. They currently state they cannot afford to make the $35k SR. There needs to be a workable formula for long-term growth and survival and it's not actually clear yet with all the inventory build-up that is currently occurring. If they cannot sell all the inventory, they cannot afford to build the cheaper version which the consumer is "demanding" with the reservation volume that had existed.