...and then replaced with a new "Server" Mac Pro configuration.

CLICKY!

Anyone got a spare £13k lying around?

I think that it is a mistake. There are plenty who will have spare 1U rack slots that they will want to use. The new MacPro is very nice but will it be able to replace the Xserve market? I am not so sure.

Apple's actions seem to suggest there isn't an awful lot of an xserve market for it to replace anyway.

I will accept that it is not a huge market. Though with the mac market growing it might be foolish. I think that unless it is unprofitable or is a shrinking sector it might be better to keep it going.

The Mac market is mainly growing in the consumer space with iOS getting a better foothold in the corporate area than the Mac has ever had.
Plus, the xServe was probaly a relatively expensive machine to produce precicely because it had relatively low sales and required a different motherboard design from the Mac Pro (it had more RAM slots and sideways mounted PCIe slots due to the form factor).
It obviously can't have been making as much money for them as they wanted it to and OS X Server will happily run on any mac anyway so there was little to keep the xServe going.
It would be nice if they beefed up the Mac Pro to at least match the number of RAM slots the xServe had but they've stuck with the silly 8 slot design for this itteration of the Mac Pro. On the plus side, the Mac Pro can house a little more internal storage but that's not really an issue for a server as you'd presumably be using an external RAID array/SAN/NAS anyway.