For many years I worked in a bicycle shop, and I see a lot of similarities with Bicycles and Model Trains. I worked in a shop starting at around 13 all through high school. When I went to college, I got a great sales gig at a higher end Bicycle shop, we stocked Trek, Cannondale, and Specialized, as well as sub brands of Trek such as Gary Fisher and Lemonde. We had all price points on the floor, from 100 Dollars to near 8-9k, I was on the sales floor actually selling the product so it gives me a little perspective on this stuff.
Every year the new catalogs would come out, The first 20 pages of each catalog was always the top end product: Madone 9.9 at around 12-15k (Similar to the one Armstrong was racing at the time). 29'rs for downhill racing (4-5K), Specialized S Works etc. Very drool worthy if that is what you were into, we'd get guys and gals coming in during the winter to "talk shop" about these bikes, few would put a pre-order in on one, but mostly just drool. The lower priced items were relegated to two or three plain pages in the back of the catalog, or not even mentioned.
Come spring, most of the product we moved off of the floor would be between the prices of 350-700, kids bikes, entry level mountain bikes, comfort bikes for the Towpath trail, a few lower end road bikes or cross bikes. I don't have numbers to back up, just what I remember, but for every bicycle about 2k we sold, we probably sold something like 50-60 of the lower price point items. But if you went off the catalogs, everyone was buying the high end stuff.
Once a year, I could do an employee purchase which allowed be to buy a bicycle from the manufacturer for cost and I remember looking at the price list and being a bit shocked how much markup there was on the lower end bicycles, compared to the higher end.
I can't specifically speak towards the toy train industry other than the little that I've participated in, but my thought is being a similar specialty/luxury market, comparable to bicycles, Lionel, MTH, etc, can't afford to let go of us that are running 027/031, if they are similar, they probably sell more volume Thomas/LC/LC+/RTR stuff than vision line or BTO stuff. I personally am not in the market for the high end gear or trains, that doesn't mean that others aren't. Just like back at the bicycle shop, I bought a nice cross bike with my employee purchase, my good buddy who worked there bought a 5k downhill bike and lived out his car. There is room for everyone I think.
*Edit for a few spelling things I missed the first time around