The argument is the a lot of PC users who are use to building their own machines or simply still own peripherals, monitor etc., want the upgradability of changing graphics cards, having a PCI slot, and more than one internal HDD bay. There are many Mac users in this camp as well. The Mac Mini is too underpowered for their liking and doesn't offer those options, as well as carrying a notebook 2.5" drive. The Mac Pro while a workhorse is overkill and too much $$ for most people's needs. Most proponents of the midrange are also gamers, so choosing a video card is a big deal. The term prosumer also gets thrown around.
I was in this camp for a long time, wanting the expandability as I am not a gamer, but wanted to HDDs etc. And I really wanted a 23/24" Apple display as I really like the aluminum of the Pro machines. But I didn't want a notebook, a la the 15" MacBook Pro with display, keyboard, and mouse setup. I wanted a desktop. I said that if Apple came out with an aluminum "Pro" version of the the iMac, maybe just the high end model that would be perfect for me, as the reality of expanding/upgrading probably isn't as real as the desire.
So when the 24" 2.8Ghz iMac came out last August, I bought one and have been very happy with it.