Given the substantial improvements in OSX Server 10.6, I don't think Apple is ready to get out of the server business yet--on the contrary, they're mainstreaming it with the new mini server.
They could, I suppose, be planning on shifting to more consumer-oriented hardware, but I don't think that's the case--they just don't talk about the Xserve because it's not the sort of product you have any reason to widely advertise or talk up to the public. When was the last time you saw a public announcement or ad for an HP Proliant or Dell Poweredge? The margins are also, I expect, quite high, and the development work can, I'm guessing, be mostly re-used from the Mac Pros.
As for why you'd buy one, while they're oriented toward small-to-medium business services or media serving, and positioned against Windows server, I think it's an overstatement to say that OSX server offers nothing at all over Linux for a webserver. The turnkey nature, easy setup, and very nice GUI does provide an advantage over other packaged Linux servers, in my opinion, though of course it can't compete with roll-your-own Linux boxes on price.
If nothing else the hardware is very nice--we're running a 1st gen G5 Xserve at work mainly as a file/print/distributed account server (does also offer FTP and simple Windows workgroup services), and it's run smoothly 24/7 for the past six years, give or take.
Certainly, if I were setting up a server today, the Xserve would be on my short list of options.
As for sales figures, Apple only breaks down unit sales into "desktop" and portable categories, so unless I've missed the figures there's nothing published for how many Xserves they sell.
