It makes sense to me, and it's a phenomenon I've noticed myself. Now that I think about it, though, I can't come up with any good examples off the top of my head where the middle of the market has truly been abandoned.
In tech, Apple comfortably occupies the premium end of the market, and other companies tried to move in (think Microsoft with the Surface) but with fairly limited success. With cars, the move has been to bigger, more luxurious vehicles, but you still have lower end models at various levels of trim. I have noticed it with, say, dentists, where sole traders and small businesses have essentially been replaced by franchises. Same for chemists.
To me the driving factor is that not everyone can compete on price, and competing for the luxury segment of the market is a fairly obvious alternative strategy. It also goes hand-in-hand with other factors like sustainability, where it might be impossible to make your product cheaply because you source local or recycled materials, or you make a product that is designed to last longer, so your customers don't return to buy your product as frequently.
I'd say the last 7-8 years I've noticed a move to luxury products in most markets just as a general trend. I call it the affordable luxury phenomenon. But I think a lot of it has been driven by cheap credit, and luxury goods makers reaching down into the middle market (the aspirational market) as much as the middle market being abandoned.