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Will the S model be priced too high?

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I remember Elon saying that the S/X would still be the leader in tech

As @proven points out just above, Elon did say something to the effect that this S/X would always be better than the 3 in some unspecified ways.

The point Elon was making was simply that new tech options that they can't mass produce in a cost effective manner will appear in the Model S/X first and then later in the Model 3 when they can be mass produced and at lower cost.

AFAIK he did not say the Model S will be "better" than the Model 3, simply that it'll have more costly options until they engineer a better solution. Basically... rich people are guinea pigs and the masses will get the fruits of that labor. :)