Reducing the minPoolCost was demanded by a lot of SPOs, especially the smaller ones, for ages. And it was a huge discussion the whole last year with a poll among the SPOs etc.
Finally was enacted 27th October, Epoch 445:
The discussion leading up to this has been, for example, summarised here:
And it doesn’t make it worse, really.
The minPoolCost doesn’t force individual pools to go down to that value. They can set their poolCost freely, always could. They are just not allowed to take less than minPoolCost. Hence the “min”.
It’s also not directly reducing the block rewards. Really not. The poolCost is only what is taken from the block rewards for an epoch and given directly to the pool operator before the poolMargin is taken from the rest which is then shared among the delegators (the pledge of the pool operator among them).
If you are your only delegator it makes no difference at all. You get the whole block rewards either as poolCost or as poolMargin or as rewards.
But it makes small pools less competitive because if you only mint one block in an epoch a large part of that is taken and not distributed to the delegators while that part is a lot less relevant if a pool produces many blocks per epoch. That’s why small pools wanted that parameter to go down.