That strategy is similar to our current best strategy for bringing peace by killing more people than the enemy. It's proven to work but it is very wasteful on both sides.
Segmenting a market is often suboptimal. See how Intel is "segmenting" their CPU market by hard locking features in "consumer" CPUs. This effectively means they are not available unless you pay big big money.
Why is that suboptimal? It certainly is suboptimal for consumers in the short run, since it helps Intel increase producer surplus. How that producer surplus is used to create better technology has a pretty important role in determining whether it's optimal in the longer run.