Ummmm...have you seen a ford focus and a mustang before? This is an apples an oranges comparison.
Focus is an economy car with cheap interior, weak engine, etc -- It is the granny panty of cars. Mustang is their performance car with an aggressive design.
What makes you buy the Model S over Model 3?
Speed? Well ludicrous mode is offered on M3, which will likely put it under 4 second 0-60. At a certain point, speed becomes a moot point to me. Roads in the US are 65MPH at the most in my area. The base M3 is more than sufficient to merge into traffic and give you a launch when you want some fun.
OK, well how about design? Hmm...actually i prefer the M3 design over the S in exterior design. We've yet to see the model 3 finalized interior, but if 15" screen isn't enough for you and having a 17" screen is a make or break deal in your car purchase, I guess you may be right.
Features? Well, we know M3 will have ludicrous mode, all glass roof. You could safely assume it'll have upgraded sound option and weather package. So if you won't buy a car without a bio-weapon system, that could sway you -- though, even that may be an option in the M3. The only real feature that could definitely sway you is the extra row for baby seats in the back...if you have a ton of kids.
Efficiency -- well, based on polls here, most people think you'll be able to get close to or over 300 miles per charge. On par with the Model S max mileage.
So if base model S gets 240 miles, 5.2 sec 0-60 for $76,500
and you can get a fully loaded M3, that is faster (with ludicrous), goes further, looks better and is basically even on every other feature that matters for 10K less -- how would they maintain, let alone grow the sales of the Model S?
If "protecting" the upper levels of a brand were a thing, most car companies would have folded by now.
So, because the one-tank range of a Focus is longer than a Mustang's, Ford is going to decrease the range of the Focus to protect Mustang sales? No. They're 2 entirely different flavors of car, aimed at different demographics.