From my point of view, in economic terms there's definately a law of diminshing returns when it comes to some bicycle components. In other words, as you go up the product line, you're getting less for your money. Some bikers are willing to pay extra for top-of-the line components, in order to save those last precious grams, or have a slightly smoother shifting derailleur. Component manufacturers definately profit more from these guys, and in turn, motivates them to make innovative products.

Then you have the bling factor. It's no coincidence that the best components, also LOOK the best

That being said, I'm having a hard time justifying upgrading my Deore components on my hardtail. It shifts so damn well, which reminds me of the old saying. If it ain't broke........