Basically because:
1)The Mac Pro is ridiculously expensive (especially in comparison to Wintel workstations/high end boxes)
2)iMacs are really pretty powerful for much cheaper...sure, they're not the exact same performance as a $3000 MacPro but unless you really really really really need that 10-20% performance gain of a MacPro (compared to a high end iMac), it's not worth it...might as well buy 2 iMacs...or, golly, just wait the extra 2 minutes while rendering something.
Both of these are very similar to arguments made against any apple products, and yet you're on macrumors so I'm guessing you enjoy some of their products.
1. - Go to HP or Dell and configure a workstation similar to the Mac Pro specs. Hint, an i7 is not comparable to a Xeon. Don't believe me? Try putting two i7's together. Beyond that, there's many differences between the two that allow Intel to charge a huge premium on Xeons. Whether or not you think that premium is worth it is irrelevant - all MP's use dual socketable Xeon's, which are expensive. Once you've done that you should find that the Mac Pro is pretty comparable price wise to its competitors. And that's taking out the consideration for OS X, other hardware such as the chassis design (widely lauded as excellent), ECC memory, the high quality PSU and fans/heatsinks, service (particularly valuable) etc.
Where Mac Pro's are admittedly expensive is particularly in GPU, CPU upgrades and memory options, GPU is a whole other bag that isn't completely Apple's fault, it looks like Microsoft will be adopting EFI in the future as opposed to BIOS so this may make it easier to use any old GPU in the future, we'll see. You'd be an idiot to buy memory from Apple, so I won't go there. As for CPU upgrades, you pay about the right price for the processor, but when you consider that you're losing one or two it is an expensive tradeoff. Of course, for many of these upgrades you could do them yourself, but it can be easy to wreck a very expensive CPU and socket this way. Once you take everything into account, stock, brand new Mac Pro's aren't expensive at all. They can seem more expensive later in life as Apple doesn't really drop the price accordingly, and the options can be ridiculous , yes. But just go try build yourself a comparable workstation and see if you can do it significantly cheaper, if at all.
As for 2. - Yes, for a lot of tasks a top range iMac can easily be just as fast if not faster than many Mac Pro configs. However where the Mac Pro's shine (CPU wise) is in software that is well threaded. All expect the top of the line upgraded iMac with the i7 at $2,199 lack hyperthreading, meaning they have only four cores. Compare this to an 8 core Mac Pro at $3,500 with 16 virtual cores and you're looking at massive differences with the right software. Don't even think about comparing the 12 core (24 virtual cores) model.
Besides that, they're different machines entirely. With the iMac with the exception of adding RAM you're pretty limited with upgrades unless you want to pry that lovely glass off delicately. And even then you're still laughably short of what you're able to do in a MP. In a MP you can upgrade or switch out most every piece of hardware. CPU, GPU, RAM, HDD (for which you have 4 slots out the box), etc. If a component fails rather than replacing the entire computer you can simply replace it. Additionally, mobile GPU's (which the iMac uses) are significantly less powerful than their desktop counterparts. Yes, that 5870 is better than the 6970m. Beyond even this, why should you throw away a perfectly good screen with every new computer purchase? Why should a desktop be slim at the expense of upgradability, heat diffusion, and as a result noise?
For some people, there's stuff you simply can't do on an iMac that the Mac Pro makes possible. Need more than one drive? How about up to 96Gb of RAM? Lots of cores? Dual sockets? ECC mem? Low noise? PCI-E? Multiple GPU's? The ability to use a different screen?