Why make an f/1.4 lens...

There is a demand for 1.4 lenses because you can set shots in low light that 2.8 zooms just cannot get.  Also, lenses like the Nikon 50mm f/1.4D are 'sharp' enough for many people needs....especially for center-portraits....

Yes, they are sharper at f/2 and f/2.8, but then again many f/2.8 zooms are sharped stopped down also.... but the Nikon 50mm f/1.4D was perfectly usable at 1.4 especially after I post-processed.

Here is an example of a post processed shot at ISO6400 on the D700 with the 50mm f/1.4D wide open.... it was very dark and even shooting at f/2 would have been a challenge

D700 50mm f/1.4D @ f/1.4, ISO6400, Lightroom 4.0