It always seemed like Apple missed an opportunity to make the iMac's a bit more portable. There wasn't much 3rd party kit for this either, like a collapsible stand, or display cover, no carrying handles, etc.

Apple heavily missing out on building a modular M1 system, akin to the RPi, could be hooked up onto a monitor or put into a laptop chassis without having to re-buy display/keyboard/speakers every time when a new processor comes out.

Heavy integration over modularity seems to have worked out for them as a company. You're also mostly describing the M1 Mac Mini.

Does this mean they are giving up on the pro user market that wants the very high performance? Or will they likely be offering a higher spec imac option in the future?

The iMac Pro was always seen as a sort of 'stop gap' solution before the current Mac Pro was launched. If you need the high performance, why not buy a Mac Pro?