I think my post is a legit question. Many people talk about their home servers but none use the high end chips.
As someone who just recently built a home server using a Core i3, I'll expound on that.
In all honesty I would have liked to have used the equivalent E3 Xeon, but in practice the cost of the hardware is out of my price range. Between the CPU, the mobo, and ECC RAM, it would have nearly doubled the cost of my server, which isn't something I could afford.
Instead I went with a cheaper build option using the i3, an Asus mATX mobo, and standard DDR3 RAM. While the system had served me fine, I made a conscientious decision to sacrifice some degree of reliability to keep costs down.
But the reason I can get away with this is because I can accept the tradeoffs. An i3 is reliable enough for me. If an error crops up and takes the system down (most likely a BSOD due to a transient memory error), then that's okay. I'm the only person affected, and my server isn't doing anything critical. The time I would lose from the server going down would be worth less than the cost of buying higher reliability Xeon class hardware.
And really that's going to be the case for most home server owners. These are systems serving at best a few people, doing things like storing movie collections, managing client backups, and maybe running a TeamSpeak server for a handful of clients. Reliability, while important, is not critical as no one is greatly impacted if the server goes down.
It's once you start getting into business computing that Xeons start making sense. Time is money, and if your file server or email server goes down, your office productivity is going to grind to a halt; your employees will be collecting paychecks, but producing nothing of value in the interim. Or if your webserver goes down and you run an eCommerce site, now all of a sudden you're losing out on business. Or putting a 4P Xeon server in would be 20% cheaper than getting the equivalent performance (at equivalent reliability) out of 1P Xeon systems. Etc.
Ultimately Xeons are for customers whom the extra cost of the hardware is cheaper than the costs of decreased reliability. Or for customers who need to maximize the amount of performance (and the number of cores) available in a single system.
Your frame of reference is that of a home user and that's fine, but it's also why you are asking this question in the first place. As a home user you are not a Xeon customer; Intel isn't even trying to sell this hardware to you. Xeon customers are in an entirely different market, and that means you have to understand something about business computing needs before you can understand why a $2000 makes sense for those customers.