It's a 'brand name' thing.
They decided their marketing approach years and years ago and have stuck with it. They are unashamedly expensive, because 'quality is expensive'. They market to those that are concerned with style and look, and they ally themselves with that. There's no doubting that image IS part of it. It's quite deliberate marketing and they seem now to be really reaping the benefits of that approach.
And, by and large, it is good kit. Out of my price bracket for all practical purposes but some of their kit, I would consider if I had that kind of money to spend.
I have got three Rapha items, all bought in their yearly sales; arm warmers, a sports wool shirt (a line that never actually made it to the production line!) and the softshell jacket. Each of these is undoubtedly well made, functional, works - and is classy! Whether you'd want to pay full price for them though is a personal decision! I wouldn't!
I stand by Rapha, despite the sneers the name attracts, even though I personally wouldn't buy it!