The post war nightmare of freeways and suburbia killed cycling—that is well known. I try to imagine how bike shops fared in the post war era though. I imagine them being left only with the hard core racing fraternity from which to make money. BMX gave them their next kind of racing. Then, whenever their market expanded, it was into some other form of sporting application for bikes, such was their modus operandi by then. There was mountain bike racing, followed of course by triathlon racing. Trials bike riding spun a few bob, and of course touring (with ultra light tents and all that) is a kind of sport too in its way. What was happening, was that high performance sports bicycles were being cemented in place as the only ideals to which one might aspire when setting foot in a bike store.
Thus for the person seeking a bike just to get around on, the question was: do I want a compromised road racing bike, or a compromised mountain bike, for my commute? How ridiculous!
Now if we look to countries where cycling was not relegated to sports clubs, but was retained as a transportation mode and quotidian pleasure, we see the persistence of another ideal: the fully equipped city bike. When I say fully equipped, I mean mud guards, luggage racks, gen-lights, internal hub gears and brakes, stands, enclosed chains, and rear wheel locks.
Though city bikes and commuter bikes are making a comeback, we are far from shaking off attitudes inherited from the days when only those who raced bikes, loved bikes. I'll pick on you Giant: what ARE these contraptions? Neither would last two hundred meters on an actual mountain bike trail, so why compromise their performance as around-town bikes by incorporating mountain bike racing design features? Why soak your customers' asses with spray if they meet with a stretch of wet road? Why make them bleed hydraulic brakes? Why make them wear back packs? Why force them home before nightfall—even Cinderella got until midnight! Why weaken a bike that looks made for hard landings, with a step-through for god's sake?
Why second guess the market's next ill informed whim, when you actually know about bikes, and could therefore help people make more informed choices?
If you are that ill-informed buyer, just looking for a bike for leisurely family rides or 5-10k commutes, can I suggest you start by looking at some bikes made for this purpose? Here are two that don't exactly set my own heart a racing, but which have the features you're after—the cheap one, admittedly, cuts a few corners, but would nonetheless bring you more joy than an $800 mock mountain bike not fit for racing.
If you do actually want to take up either road or mountain bike racing, expect to pay around 2k for the bike, plus another $600 or so for shoes, clothes and helmet. Then expect to pay double that in 5 years, when you're addicted.
Conversely, if you are already a competitive cyclist, why not consider buying a city bike— don't worry, those Sidi shoes will be safe there in your Chainreaction shopping basket. But with a city bike, you might actually find some applications for that fitness you've built up riding in circles.