Because market segmentation in itself, as a concept, is not a disadvantage, which means that lack of it is not an advantage in itself.
Like I said, market segmentation in software does not necessarily have to be a bad thing. Consider a hypothetical text editor that comes in two editions. The "basic" edition has features like syntax highlighting, regex search and replace, etc. The "advanced" edition has a feature that allows you to open and save files not just locally, but also via SFTP. When it was first written, the editor didn't have the SFTP feature, the author developed it because there were some users who asked for it; they weren't the majority, but the author thought the idea was nice. Instead of incorporating that feature into the one and only edition, the author decided to offer two editions: a cheaper "basic" and a more expensive "advanced" edition. It was the author's idea of placing value on the effort involved in writing the SFTP feature. The majority of users can go on happily using the "basic" edition without paying extra for it, while those who really want SFTP can pay for it.
One way of looking at this market segmentation is to say that the author was greedy and imposed an artificial limitation on one of the editions in his product. Another way of looking at it is to say that the author offers two products that satisfy different needs at different costs. If we were talking about two products from two different authors, we would be comparing their features and prices quite naturally, without complaining about market segmentation.
However, when you're offering exactly the same product, with no differences, for two different prices, then you're just being greedy and taking advantage of your customers (which is something commonplace nowadays and most people, myself included, just accept it). Close to that is the situation in which you slap a truly artificial restriction on a cheaper edition of your product, not through a lack of feature, but through a deliberate crippling of that feature (e.g. the five-dollar edition can open only up to 3 files). The exception, of course, is a crippled free edition which allows potential customers to try your product before deciding whether to buy it. In that case, you're just being annoying ;)
That, in summary, is why I believe that market segmentation is an advantage, within certain ethical bounds.
To me, market segmentation is different when it comes to software.
In your text editor example, the author can add an SFTP feature, but once it's coded it's coded. There's no extra cost to ship out all software with that feature after it's coded, except perhaps some extra support costs. (I imagine those would be pretty minimal.) At that point, I only see two reasons to segment the market from the users' perspective:
1) To not confuse your less advanced users with more features. This is a pretty weak reason, IMO.
2) To make sure that the people who actually wanted the feature are the ones paying for it. After the cost of development is paid for, this reason goes away.
Beyond these reasons (unless I'm missing something, which is entirely possible), releasing different grades of software just hurts your users. It makes you more money, though, so maybe that's enough justification.
I'm not sure how having different editions of the same software hurts users, but maybe I'm just applying a different grade of the same meaning to the word "hurt" ;)
I suppose that the author could let users drive new features by making a list of proposed features and having users donate money towards the implementation of those features. I'm pretty sure I've seen that somewhere. But the segmentation seems to be the easier way.
Going back to the editor example, suppose you have two editors from two different authors; one is cheaper, the other has SFTP feature. The author of the one with the SFTP features put a higher price on the overall development effort than the author of the cheaper one. And he's charging you more than the other author per every copy, even though he coded it only once. Why is this so drastically different from having two editions of the same product from the same author?
To take your logic a step further, why is the author charging money for every copy? Once he coded the whole product, it's done and there are no per-unit shipping or manufacturing costs. The alternative would be to somehow get the money, upfront, that would cover the development costs and net him some fixed profit for it. Who knows, maybe if we could switch to that business model piracy would no longer be an issue. But until then, as long as charging per unit of software is accepted practice, I don't see a difference between two editions of the same product and two products with different features. (And I'm not talking about unscrupulous feature crippling here, that's different)
It increases the price to the users of the "advanced" version, because by keeping 2 versions the seller has to collect AT LEAST enough extra to pay for the increased overhead costs of dealing with 2 versions.
>There's no extra cost to ship out all software with that feature after it's coded
By this logic, Chipmaker should only sell their most powerful processors, because the actual manufacturing-cost is not really the reason for the price difference between a top of the line i7 processor and a different one with lower specs.
You can look at it from a different angle: Let's say you have a powerful program and you are charging 1000$ for it (e.g. Photoshop). Your market research has shown that a lot of "casual user" are looking for a product like the one you are selling, but are not willing to pay the 1000$. So you develop a version without the more advanced functions and sell it for 200$ (e.g. Photoshop Elements).
It's not really about "not confusing the user", but about offering another option. How does this hurt the consumer?
I think that actual manufacturing costs are often the reason for price differences between a top of the line and one with lower specs. The processor dies are huge and costly, and throwing out non-perfect dies is undesirable. Due to the intricacies of silicon manufacturing, the same design can have different maximum speeds on different dies, and due to defects, the same design can have different operational sections on different dies. This leads to speed grading and the disabling of cores/caches, and hence a whole line of chips from one design.
Like I said, market segmentation in software does not necessarily have to be a bad thing. Consider a hypothetical text editor that comes in two editions. The "basic" edition has features like syntax highlighting, regex search and replace, etc. The "advanced" edition has a feature that allows you to open and save files not just locally, but also via SFTP. When it was first written, the editor didn't have the SFTP feature, the author developed it because there were some users who asked for it; they weren't the majority, but the author thought the idea was nice. Instead of incorporating that feature into the one and only edition, the author decided to offer two editions: a cheaper "basic" and a more expensive "advanced" edition. It was the author's idea of placing value on the effort involved in writing the SFTP feature. The majority of users can go on happily using the "basic" edition without paying extra for it, while those who really want SFTP can pay for it.
One way of looking at this market segmentation is to say that the author was greedy and imposed an artificial limitation on one of the editions in his product. Another way of looking at it is to say that the author offers two products that satisfy different needs at different costs. If we were talking about two products from two different authors, we would be comparing their features and prices quite naturally, without complaining about market segmentation.
However, when you're offering exactly the same product, with no differences, for two different prices, then you're just being greedy and taking advantage of your customers (which is something commonplace nowadays and most people, myself included, just accept it). Close to that is the situation in which you slap a truly artificial restriction on a cheaper edition of your product, not through a lack of feature, but through a deliberate crippling of that feature (e.g. the five-dollar edition can open only up to 3 files). The exception, of course, is a crippled free edition which allows potential customers to try your product before deciding whether to buy it. In that case, you're just being annoying ;)
That, in summary, is why I believe that market segmentation is an advantage, within certain ethical bounds.