It might if it were aimed at being targeted toward consumers and priced cheaper which is what I was imagining. I did not think about pricing in the iMac range probably because I figured it would make no sense to sell at that price range lacking a display and iSight camera.A mid-tower would not cannibalize iMac sales as they cater to and are two different markets.
And anyhow it's kinda silly to argue this point anyway - Ever since the iMac came around Apple's philosophy about computers has been about non expandability (outside of RAM and HD) with one sole exception - workstation models that you have to really pay for. I doubt it's about sales - they just don't see it worth expanding their lines like that.