> but who is Apple selling these to in the long-term?

I've thought this about every iPad model they've made, but obviously I'm wrong every time. I'm sure there are specific professionals who will find this useful, but in my guess is that most iPads are sold for casual use. As to why you would buy the higher-end model, because if you're in the market for an iPad, you probably have disposable income, you might as well get the shiniest one you can.