Mostly, as already noted, for essential market coverage. Fundamentally for two reasons, I believe:
1. Because they just can.
2. Because they have to.
They both can and have to because they develop technology that gets put into their high end equipment. Some of what is in the 1Dx today will eventually trickle down and be in a $100 P&S in a few years (if the market holds together that long). Last month I bought a clearance P&S (A1200) from the refurb shop for $35. It has a Digic 4 processor, good metering and reasonable AF. And, for the poster who said he'd buy one with an optical VF, this one has it. The VF is tiny and unsophisticated, but it's a great option to have in some situations. They can do it, so they do.
Now, imagine (difficult as it may be for some of the affluent posters here) that you have a severely limited budget and you're really interested in photography. You'd love a 1Dx, but the $200 you have won't even get you into down payment land (if you could even get credit!). Say you're 18 and in college and working a PT job and know that phone cameras don't really cut it. Canon has this whole vast array of cameras that get you immersed in "shopping." You're learning features, comparing capabilities, etc. You find a lot of these cameras can do what you want -- the stuff the phone cameras can't do.
Here's an example of a woman I know in a situation where she can only afford that A1200 I mentioned. This is the kind of work she can turn out with it because she is interested in photography and has great inherent ability:http://www.flickr.com/photos/vintagevix/8427228784/#in/pool-1671753@N24
Frankly, I'd be proud to call that my picture with my whole 5D3 and RAW and LR, etc. She can do it with a minimally manipulated JPG out of camera -- probably Canon's cheapest P&S.
This woman aspires to better equipment to fulfill her vision -- and Canon has a lineup to take her as far as her money can ever take her. Maybe, if Canon's cheapest was $200, she may not have been able to afford to see how good she can be. There has to be a $100 camera. And there has to be a $150 camera. And there has to be a $200 camera. And some have to have long zooms and some have to have short zooms and some need to be "ruggedized," and some have to be.... This is why they must do it.
So, Canon develops leading edge technologies they can sell at a premium to demanding professionals (who can afford it). And eventually, some of this tech trickles down to lower levels where it can provide funding for development of more leading edge technologies. This is why the can do it.
Anyway, I think that's a piece of it.