It's not that there wasn't a market, it's that the Xserve wasn't sold in the way that companies that buy lots of rack mount gear handle procurement. If they certified specific configurations of commodity hardware for OS X and sold them through existing reseller channels as a new SKU, it would be much easier.

That said, there's probably not much of a market for it anymore since we've gone a few years without an OS X rack mount machine and people have found other solutions.