But exactly what are people doing in Dubai? What holds up the economy? Is there manufacturing? R&D? A healthy financial district?

It seems like it was all built for "something" to show up, and it never did. So everyone is just busy hustling each other. A city full of nightclub owners.

Dubai was trying to buy and monopolize the luxury market. Yachts, planes, real estate, jewelry, fashion, etc. They were simply trying to divert all of the world's luxury consumers to one place (Dubai) instead of other places (Paris, Monaco, New York, etc.).

Las Vegas, on the other hand, does quite nicely as a city full of nightclub owners.

There's definitely a future for Dubai as the Las Vegas of the middle east, if that's where they choose to go.

Las Vegas is Las Vegas because it has the perception that "anything goes". So far Dubai has no casinos, a no-skin dress code, no alcohol in public, and they're cracking down on kissing. I'd say Vegas is safe for now.

Vegas isn't in any danger of being replaced by Dubai of all places. Vegas is vegas in part because it is shielded by the laws of the USA. Unlike Vegas, Dubai is controlled by the laws of Sharia as interpreted by the ruler of the day.

Well, it doesn't have to be the Las Vegas of the world, just the Las Vegas of the Middle East. But yes, obviously religion is the factor that holds it back. If the emirs (correct title?) can get it into their heads to let money beat religion, though, they have a huge opportunity.

I wonder how long it'll be before the decision to go that direction is made?