The Model S is a full-size high performance luxury sedan, and very price-competitive at ~$100k decked out. It's competitors aren't the Honda accords of the world, but these:
http://www.motortrend.com/roadtests/sedans/1301_2013_bmw_m5_.... The BMW M5 is comparably priced at just over $100k "as tested" and the Porsche Panamera GTS is around $150k. None of these are "perfect" cars.
The Model S goes toe-to-toe with those cars that get 14-20 miles per gallon. It's quarter mile time is right between the M5 and the Panamera.
Maybe it's stupid, but measures of how quickly you can haul 4,500+ pounds of luxury car from 0-60 are the coin of the realm in this segment, and the Model S is enormously impressive in this regard. It's a brilliant play by Tesla, actually, competing with high-margin cars that can justify high-budget R&D before working down the line.