I think you guys seriously underestimate the sophistication of the average entry level dslr consumer. A few years ago, that was me. I didn't know much about cameras back then, but I sure did not go down to best buy and plop down $600 for the first dslr I saw. I did months of research on the internet first. Before I purchased I already knew that MP was not as important as IQ (also that MP did not = IQ). I also understood that buying a dslr means you are buying into a system of lenses and accessories that are at least as important as the body itself. Maybe all consumers are not as thorough as I am, but I find it hard to believe that the "average" consumer that is smart enough to know they want a dslr is so uneducated that they are reduced to the levels that you guys on here claim.
Sub $200 dollar cams are an impulse buy and not subject to much thought - therefore you get very inexperienced people buying them who look at MP count. Cams above $500 are no longer an impulse buy and the consumers in the market for those cams are more sophisticated than you think.
I agree with you that a 600-1000 "entry level" camera in NOT an impulse buy, and that the "average" consumer has above average intelligence and has done some level of research- even if that means a trusted friend's advice.
But as I stated earlier, I believe the "average entry-level DSLR user" will not advance beyond that camera. They will have no need to, as even an entry level camera is MORE than enough for what they will ever need. As is the perfectly capable zoom lens with image stabilization that came with the kit. They will also get their hard earned money's worth out of it because chances are it will be the family camera, and wont be replaced till it dies. They won't buy multiple lenses and wont complain when a new version of their camera comes out with one stop more dynamic range in the shadows! They will leave the camera on auto everything and enjoy what they paid for- great photos with the push of a button.
I am not saying entry level DSLR users don't go on to higher-end models, because they do. I had a Rebel XS (cheapest DSLR) 5 years back because that was all I could afford at the time. Before that I had a "full-frame" Rebel G!
There are different markets that overlap within these systems- that is the purpose of different price points and features.
I can't even tell you how many Aunts and family friends I have given photography 101 pointers to who have owned their DSLR for years! And try explaining that their 18-55mm lens is cropped to blah, blah...