Overrated surely? It's a pretty bog standard MCU, no wireless support, mediocre deep sleep. I don't know why you'd pick it over an ESP32 or nRF5x.
The only standout feature is PIO which is definitely interesting but very niche. It's also patented so say goodbye to any portability or FOSS vibes. (If you want a FOSS version btw, check out https://baochip.com/)
If it didn't have the Raspberry name behind it nobody would even have heard of it.
If you want something that can do some dumb buttons and lights handling on a mass consumer device, it's not ideal.
I would say it is still underrated.
PIO combined with DMA and the independent bus SRAM banks allow for immense combinations of capability.
If you want to do something digital and specific beyond a few MHz the the RP2350 raised the ceiling of what you can do before requiring hardware or FPGA.
It still has some areas where it could be improved, but most of thise would not have been apparent until you really stretched the design.
Having extra PIO GPIO without physical pins but the ability to configure connecting pairs together in software would add a lot of capability.
Perhaps an interesting test/benchmark would be to get a microcontroller to pretend to be an SRAM (or better yet two independently accessed SRAMs) while outputting the lyrics to still alive on a serial link.
The virtual SRAM performance characteristics of timing tolerances and latency would be a respectable approximation for arbitrary digital signal handling that any particular MCU might be able to manage.
Are you kidding me? It costs a fraction of the competition and you can use just about any pin for anything you want! It makes designing boards for the RP series so simple and easy!
Contrast that with STM32 where you have to constantly reference the data sheet to make sure you're using the correct pins for say, I2C when you're running in a particular mode. And since you're running in that mode, you now can't use other pins for certain things. Ugh! I hate it!
Then there's the issues with picking the right-size part number and making sure the pins you want are 5V tolerant, checking that you're using the correct ADC, and... Ugh! It's a pain in the ass!
Other chips aren't much better as they all have those same problems.
ESP32 is nice because of the zillions of built-in peripherals but configuring the damned thing can get really complicated really fast. It's so complicated, in fact, that they had to make a Makefile (as in `make menuconfig`) that rivals the Linux kernel in the sheer number of options/submenus.
The PIO are pretty great and not niche. Almost any embedded application needs mixed signal interfaces. You could say embedded applications are niche, but not that embedded applications needing mixed signal interfaces.
A serious warning: read the RP2350 errata carefully. You may be better off buying old 2040 inventory.