It inflicts great pain and suffering on the programmers using it, without returning any significant advantages. I don't think there is ANY market segment that D3D is apropriate for, OpenGL seems to work just fine for everything from quake to softimage. Programmers have one good api, vendors have one driver to write, and the world is a better place. Raw OpenGL 1.0 has several holes in functionality. D3D retained mode is a seperate issue.
Retained mode has very valid reasons for existance.
It is a good thing to have an api that lets you just load in model files and fly around without sweating the polygon details. Retained mode is going to be used by at least ten times as many programmers as immediate mode. It could be implemented to emit OpenGL code instead. I haven't done serious research here, but I think D3D has a real edge, because it was originally designed for software rendering and much optimization effort has been focused there. Software rasterizers will still exist to support the lowest common denominator, but soon all game development will be targeted at hardware rasterization, so that's where effort should be focused.