What I don't get then is why are diesel dummy's any less cost prohibitive than steamers? By producing more product your tooling costs per unit sold drop. The newer products are much better looking than that of say 10yrs ago, and having a dummy available would surely enhance one's layout it they were similar locomotives and just numbered differently.
I still believe the manufacturers are missing the boat on this one. I believe there is a pent-up demand for items like this.
I heard the same type lame excuses when I was pushing Right of Way Industries and Lionel to produce an articulated engine back in the 90's. Initially they didn't think there was a market for it and it would be too costly. But low and behold when RW produced the first articulated engine B&O 2-8-8-0 they were sold out! Later they did another in conjunction with the Henry Ford Museum, which I had helped facilitate. Guess what they sold those too. Only then did Lionel and MTH and then Sunset (was pushing them to do an Allegheny as well) jump in.
Just because the accountants did the math doesn't mean they are 100% correct in their assessment. Most times those fellows lack the vision to see ahead because it is clouded by all of those numbers.
The circuitry for lights and smoke could be an aftermarket add on for those who desire it. Even simple lighting could be added without much difficulty.
There wouldn't be any real need for warranty on them other than being delivered in one piece to the purchaser.
It is true that if you look around you can find some deals on older locomotives that may not be in running condition. But they aren't the same as what you can purchase today wrt detail. It's also true that if you run some of your trains long enough they will become dummy's in due time due to circuitry issues.