Thing is, you're all dismissing it on looks, which as you know are purely subjective (and if we're honest a judgement should only really be made on this aspect once you've seen it in the flesh).
Every car is a compromise, in one way or another. I currently have a MK7 GTD which is great, but I do miss the GTI I had previously and would like something a bit faster. As a Golf fan an R is the logical next step, but I've got two growing children who want to take bikes and scooters to the park. Going away for a long weekend is beginning to be a struggle, and that's before you factor in the smaller boot of the R hatch. Upshot is that I need a bigger car! Step forward the R estate, everything an R is... but more.
It may be niche, but in reality it offers more answers than the hatch. I think it may be very popular.
I'd add that a guy at work has recently took delivery of a fully spec'd up midnight blue Golf GT estate and it actually looks superb.