camera wise, the bigger sensor and high megapixels is no match.
Do you own 808 PureView? If yes, you will know if you compare.
But that depends how important and detailed you look into it. For most people, most of the time, you don't utilize it fully; but when the time when you need it, it's nice to have and no other smartphones can do it (except the Galaxy Zoom).

Yes, 1020 solve most of the problems for 808 in terms of camera issues. It's the price tag and lack of storage space is the main concern.

It depends who is the buyer. If you check before L1020 release and during it's released, you will find the price is actually one of the MAJOR concern and what cause it's sales down. The spec is outdated, and no, please don't say Windows Phone don't need good specs, and yes, it can run well with low spec, but doesn't mean we cannot get better specs, moreover, for the price we're paying, you could get a very good spec smartphone. And no, it's not just the camera module alone, the 808PV has slightly bigger sensor and the technology was there since 808PV which is > 1 year ago since L1020 launch.

Lastly, they could price L1020 < 2K. It's really a matter of "decision". Many of these products, are selling way way above the cost price, and it's how they decide it price it. Usually, they do market survey and also get feedback from the consumers through various means (even reviewing forums, you may sometimes notice it, how they do it and to see the response).

L1020 capable of taking 38MP size photo, even support RAW (later), and FullHD video recording, a smartphone which focus on camera and video recording. IMO, it's quite a big issue. Imagine having out of storage space (apart form the battery) when you're on holiday taking family videos.
At least now, there is 2-in-1 thumb drive with USB OTG, which allows some convenience, but if not wrong, you need latest WP8.1.

Looking at the response for L1020, kinda worry they might stop this range, moreover, there're other Lumia with 20MP+ PureView. The Lumia 1520 launch just not long after L1020, it comes with better display, external storage option, 20MP PureView, and price much lower than L1020.

Point noted. But price factor is controlled very much by them, how they want to price their high end, mid-range and low end. Moreover, they should also consider the price point for 808 PV and finally, most importantly, to capture the market. No point pricing it very high and ended up poor sale. I can only say, they "were" confident it will sell well and initially, yes, people were excited with it, and many people actually responded they're willing to "pay" high for it (all this, affects the decision).

Many companies, they hire or look at market survey results, showing charts, etc. If the results shows the respond from the survey, people are looking forward to it, many people willing to pay high for it. What will the decisions be?
Can you really just follow based on these "survey" results?
This happens in various other industries, not just mobile. This is one reason why, these companies may not really understand the consumer because they're looking at statistics and results based on "such" survey.

808 PureView price was surprising actually, less than RM1899 (if I remembered correctly). A high end Nokia Symbian usually would easily cost up to RM2499, moreover this is the first PureView with 41MP sensor, and the ONLY one if the market.
As for L1020, and previous Windows Phone, it's really the decision how they want to price it. They could price it lower or higher. Some may say the market price, but there's always someone or the first one to start increase or decrease the high end device price. If the price goes higher, and others will start to follow the trend. If they price it right, get more buyer, they may become more popular, capture more market. In technology, it's important to capture the customer first, because once the customer "switch" or "choose" another, you're less likely to re-capture this customer, ESPECIALLY, if the customer settled down on another platform and reluctant to change to another.
Look at now, Chinese phones are capturing the market and users, someone have to be the first to make the change, and the Chinese brand did it now.
Back then, it was "whole family" using Nokia, then it changed to "whole family" using Samsung. Now it's starting to change towards "whole family" using XiaoMi.
How Samsung rise, it's because of Nokia, majority of their users switch from Nokia. Nokia Windows Phone is already not doing well, and yet they still decide to price it high, when they "can" and "could've" price it much lower. Every mistake they make, they will loose more and more customers. Just imagine, how many Symbian users they have lost, and they lost many 808 PV users as well when they didnt' price it right. (just look at 808 PV users, how long they used the device and how loyal were they, and some that actually upgraded to L1020, and they were still sticking with it. Just imagine if they managed to capture and grab more of these 808 PV users to upgrade to L1020).

Yes, I agree on the part where most important it has all the necessary apps. Actually, once the person get used to it, it should be OK. The difference is when the person switch to another more common platform which used by many, then find that actually he/she was missing many things or missing out from other "circles", which he/she have no idea about in the past. After all, nowadays, almost everything about smartphones are apps.
This above really depends on individual and how he/she utilize his/her smartphone.