YES. If you search through the forums, nobody would recommend the i7 950 or i7 975 unless the OP has an insane amount of cash, has maxed out every other piece of equipment, and wouldn't dare overclock.
Intel has quite a monopoly on the high-end segment of computer processors today, nothing could come close from the competition so why sell it cheap? From a financial point of view, it does work.
Assume it costs intel $100 to produce one i7 chip (regardless of the clock speed), then sell the top two models at $500 and $900, instead of the $200 the i7-920 is going for. That's already a 5~9x profit for basically producing one product!