That's my point, just think about what they could do with what they already have? The iMac is here to stay for awhile, with just a few more millimeters and a couple of optional openings on the back i can see several nice options available to keep the line alive for a long time.
To let it all out, I think the iMac is great the way it is. It's selling well (yes because it's the only choice) and most people that do consider it aren't worried about upgrading the innards at all.
I really think Apple just needs to tone down the Xeon/FB-DIMM Mac Pro a notch and bring it back down to the $1499 price range that was available back in the day.... that price range mind you was available with the iMac starting at $1299.
The advantage users got out of it was an all in one machine, or $200 more and an upgradeable tower. Give users desktop quad core chips in a BTO Mac Pro chassis and price it at $1599 and Apple would have a winner.
The iMac doesn't have to loose for the xMac or Mac Pro @ $1599 to win.
p.s. Or give us the choice to strip the Mac Pro down to the ground.... I mean bare bones, no HDD, no RAM, no optical, only the hard to find GFX card of choice and a full install of Leopard and iLife for $1999 on a single CPU machine would be an improvement.