Products are segmented according to price, not features. There's a different market at each point and this determines what they will get -- not the reverse.
They have money now, but do they have the resources? Apple's software quality has arguably taken a nosedive, and they've started missing deadlines even for hardware.
Assuming a kind time traveler gave 1997 Apple a few billion US$; could Apple simply have bought its way out of its problems?
There was the old Apple II and new Apple II. Seeing as they went past 6 revisions of Apple II there was considerable churn.
There was never much of a 1st party peripheral market. Like we see with iWatch. That nearly exclusively 3rd party.
Depends on how early you go. The II+ was a straightforward upgrade to the ][ that replaced it, but the IIe was sold alongside the II+ for a long time. And then it refused to disappear while they sold the IIc and then IIgs. And don't forget the not-quite-part-of-the-family Apple III!
Up through the early 80's they had a clean lineup. After that there were as many as four different variants on the Apple II in the market at a time.
As much as I like simplicity, if you look around there are tons of cases like this around us, and that's not because these companies are idiots who don't understand simplicity but it's because their products have reached saturation point where making it simple won't get more users. They need to expand horizontally by building variations that appeal to a wider audience.
Sure it's kind of annoying, and you and I may not understand the benefits of the 9.7 inch iPad, but I am sure there are many people who understand exactly the benefits of 9.7 inch iPad vs iPad pro and will rush to buy them.