Is there a market for Escalades? Yes.
Can GM make good profit on Escalades? Heck yes. (Probably five figures on each one sold) That’s why they were all so bent on making them in the first place.
Do people drive Escalades alone? Yes.
Does Escalade Hybrid get better gas mileage than non-hybrid? Absolutely. (Non-hybrid does 12 mpg city)
So what’s your problem?
Are you suggesting that GM should stop building Escalades and leave a niche in the market for some reason?
GM can’t compete with Japanese Big 3, because they’ve neglected fuel efficiency and build quality of their low-end cars for too long. They can retool factories, spend money on R&D, and maybe 2012 Ford Focus can soundly beat 2012 Toyota Corolla. They are getting there. 2005 Focus was a rather poor performer compared to 2005 Corolla, 2009 Focus and 2009 Corolla are very close. In the mean time, GM needs to survive. The best way they know how is by building Escalades.