People buy the S for many reasons, and some S owners have never owned a car in that price and size class. But comparing the Tesla S to the Mercedes S class is certainly valid.
Agreed. I drove a '97 S-10 Pickup before my S, and had the S not been available, I would be driving a Mustang. That doesn't mean I think the primary competition for the S is pony cars or 15yr old pickups. It's just how it worked out for me. I think Tesla has been clear in marketing materials to label the S as a "performance sedan" rather than a "luxury sedan", so I do think you could make a case that the MB S-class is not its chief competition, but rather sports cars, but then they just don't look like they'd be in competition. On paper, and in appearance, the S-Class is very comparable, so it makes sense for Tesla to set their sights on that as a benchmark. If you disagree, that's fine, and you're not obligated to "buy" Tesla's chart, or their cars, or their stock, but I know from driving it, that I wouldn't choose any other car, regardless of price/features, because the driving experience is simply incomparable.
For example, last weekend I went to a Cars & Coffee event at
StlMotorcars, where they sell cars from Bentley, Rolls Royce, Maserati, Lamborghini, Bugatti, Lotus and Aston Martin. As I looked around at all the beautiful cars, some of which could've been on posters in my childhood bedroom, I realized that I wouldn't buy any of them even if they were half the price of my S, because they wouldn't be as fun to drive, and the gas costs at 10-15mpg would make them more expensive in the long run. Granted, as my story above would imply, these are not cars I would have ever considered in the first place, but it just reinforced my belief in Tesla regardless. They made a car in a price category that I never would've considered, and not only got me to consider it, but to buy it, without even advertising it to me. That, to me, is impressive in itself, and says quite a bit about the Model S.