Here's my theory. Apple has made its reputation in the 90s with the film/graphics/illustration market, and that's where the Power Mac/Mac Pro was a critical product. Once the switch to Intel was made and laptops started catching up in speed/GPU power, less people needed a fixed tower just for Photoshop/After Effects/Maya, they just put those apps on a laptop. Moreover, the professional market is always smaller than the consumer market, and consumers don't want desktops, so Apple just went where the money is.

They got rid of Xserve and they'll likely get rid of the Mac Pro if demand falls significantly.

Well, there's going to be a major update of the Mac Pro this year, widely presumed to be something more than a mere upgrade of the internals.

It's difficult to explain the continued use of outdated chips over the past few years, especially after they discontinued the XServe and told everyone to use the Mac Pro instead.

I suppose the Gruber-esque answer is that Apple (especially under Steve Jobs) wants to present an elegant vision of what computing should be, every product a work of art with considerable mass market appeal. The Mac Pro is basically indistinguishable from a bulky 90s tower PC, and very few people actually need it.

It's a decidedly unsexy product. Apple is not Dell or Lenovo, they make very few products and they make a very big deal out of each one of them. The Mac Pro is an unfortunate necessity that they cannot reasonably discontinue. But it's not a product that Apple really wants to make.