Apple is caught between their high-margin strategy and falling market share. The 5s/5c was a first try to do something but those were too similar to each other. Making the 5c cheaper would have eaten into the margins too much and making it crappier would have made it too crappy. So they have to make the "premium" version more premium and the budget version more different so it isn't just a cheaper iPhone.
I guess the 6s will have a sapphire screen, a 4.7" display with minimal bezels, an aluminum/ceramic case, the fingerprint sensor, a better camera and a faster SoC. The 6c will have a glass screen, a 5.x" display, larger bezels, a thicker plastic case, no sensor, a cheaper camera and a slower SoC (making it more of a phablet than a smartphone). This way they can charge a premium for the 6s, with more than healthy margins and the 6c will be sufficiently different from (and cheaper than) the 6s without one being just a slightly cheaper or more expensive version of the other. Those who want the 6s won't just buy the cheaper 6c because it is a very different beast and there'll be lots of people buying the 6c who wouldn't have considered an iPhone at all before.
It's one of the very few things Apple can do without cutting deeply into the margins. Up the margin for the premium version and make a version with tighter margins that is so different that you don't just switch to that for the price and can draw in new customers.
Well, as far as the sapphire goes: It's just there to justify higher prices and up the "premium" notion. It also may have some practical value, but honestly: My iPhone 4 is now more than three years old and there's not one scratch on the screen.
(And I also think that with smartphones becoming just "normal" products instead of "small computers for nerds" having more options in all directions is a good thing. In most normal products you have much larger price spans than even that. Go and buy furniture, clothes, houses... there's easily an order of magnitude between the cheapest and the most expensive even without going into the most outrageous luxury offers.)