The smaller boutique watch houses such as IWC, Jaeger, Patek etc, put out far less volume and use old world craftsmanship and engineering that watchfiles will appreciate.
I guess it is all how one wants to view it. One could make a point for the state-of-the-art factory that Rolex has. (Before I go any further, let me make it clear that I have nothing against the brands you list, all wonderful pieces and I'd be glad to wear them.) I would be willing to bet some of these "small" boutique companies would love to be selling at the level of Rolex. Furthermore, I am not sure of what craftsmanship and engineering you are alluding to.
In my opinion Rolex takes a lot of heat for two main reasons, some of the people who purchase them, as Newbee alluded and because they are "on top", if you will. On top in that they are a household name and a leader in sales, in regards to mechanical watches. No matter what the topic, those "on top" always have a target, any issue good or bad is amplified.
As you stated, Rolex sells a lot of watches, not just because people want to say they have one, although that happens, and kudos to Rolex for building such a name, but there are many that buy them for what they are, an extreemly good mechanical watch, all with in house movements. Spend some time on Timezone.com and you will see that the Rolex forum is the most active with some passionate and (very) knowledgeable people about the brand.
