Airbus probably should write off doing another version of the 350 and try to beat Boeing to the punch with an up to date plane in the 320 - 737 range.
They do that and they surrender the widebody commercial aircraft industry to Boeing for 20 years or more. Your talking about 1 to 2 trillion dollars in lost business and 100’s of billions in lost profits. Those widebody aircraft generate the big profit margins. While its the sensible thing to do given how badly they have screwed themselves by building the A380, Euro pride will never allow that.
Airbust has no choice but to build the A350, even if it doesn’t sell much. They will find back channel ways to fund the project via subsidies. Airbust is a european job creation program first, a commercial aircraft builder second. Its the way its always been.