Intel 860s - not 860

Solution
It is exactly what you said:

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Update (3/9): Shortly after this story went live we got on the phone to discuss this SKU with Intel representatives, who claim it was conceptualized as a complement to the company’s recently-released Clarkdale-based Core i5s and Core i3s.

As you know, those are dual-core models with TDPs of 73W and 87W. The Core i5-750S and its 82W TDP is, according to Intel, the only quad-core Nehalem-based processor able to fit within the same thermal constraints and employ the same thermal solutions as the Clarkdale-based CPUs.

While we don’t have any examples of smaller form factor designs enabled by the 13W savings, Intel is adamant that the Core i5-750S is intended for the channel and its unique needs, rather than...
It is exactly what you said:

"
Update (3/9): Shortly after this story went live we got on the phone to discuss this SKU with Intel representatives, who claim it was conceptualized as a complement to the company’s recently-released Clarkdale-based Core i5s and Core i3s.

As you know, those are dual-core models with TDPs of 73W and 87W. The Core i5-750S and its 82W TDP is, according to Intel, the only quad-core Nehalem-based processor able to fit within the same thermal constraints and employ the same thermal solutions as the Clarkdale-based CPUs.

While we don’t have any examples of smaller form factor designs enabled by the 13W savings, Intel is adamant that the Core i5-750S is intended for the channel and its unique needs, rather than the do-it-yourself enthusiast market. This is perhaps most evident in the fact that Core i5-750S processors are fairly rare at etail.

Nevertheless, we maintain that it’s important for enthusiasts to be educated regarding the differences between the -750 and -750S, especially since the ‘S’-class model is notably more expensive and quantifiably-slower, as you'll see in the following benchmarks.
"

http://www.tomshardware.com/reviews/core-i5-750s-power,2557.html

It is not really intended for do it yourselfers. It is meant to be lower power for certain applications (to fit a quad into OEM boxes designed for duals).
 
Solution
I am not too sure as to the use of this CPU except maybe HTPC solutions or possibly people looking for a lower power version.

the last time Intel released a "s" version was with the Q9550 and a few others that gave pretty much the same performance but allowed for a lower TDP and total power consumption levels.

Maybe they went too early?
 
I don't think it was really meant to have a use in the build it yourself market. It was more for Dell an HP, who were sitting there thinking "We would love to shove a Quad core in this machine (the shiny/new affect will make it sell) but the TDP is too high for our current cooling". Now problem solved. I bet for an OEM buying in bulk these are reasonably priced.