Doubling up, the problem these days is that its very difficult to avoid that situation and still pick a viable seller, expend 1000hrs on a non doubled model but with lower interest might garner 250 sales, or spend 1000hrs that is doubled up and take half of the potential 500 sales. These days there really isn't much in it.
The golden egg is the one nobody has done before or is so old a new version will sell, 1000hrs and get 500 sales, those are hard to find and come by....because everybody is looking for them

.
Doubling up does have its benefits, it keeps both teams honest and pushes the level of detail up on both products and that benefits the customer.
Doubling up also gives customers choice, additionally it might reach different markets, some may never buy from vendor A but will from B.
Then we have the personal side, just because someone else has made another P-40 recently, does that mean David is never allowed to make another until the current one is old and decrepit ?, if your only going to make 50% of the slice then you might as well make it from something you enjoy making. Having said that, launching knowingly into a doubling product, you then cant complain if it doesn't sell well like some vendors have of late.
As the market shrinks I think your going to see more and more doubling up, primarily because those are the most popular subjects globally, people fly what they like and builders build what they like, sadly that seems to center around quite a small collection of aeroplanes in the history of flight.
Check the Concorde thread, several posters in there have both packages, people quite often buy several versions of the same model, things like the P-40 are always going to sell, doubling up on say a Gladiator or Wellesley, well then that could be commercial suicide, but a popular plane like the P-40 or P-51, your going to get a return what ever happens, and if you built the model for passion then any return is an extra.
It isn't only restricted to FS, look in your local supermarket, take bottled water for example, now who on earth buys bottled water ?, yet look at the choice you have from almost tens of suppliers and vendors, its water for cripes sake, most comes from the same geographical areas so the only difference is the label, that is essentially what your buying, a different label, its not as though theres any secret ingredients inside like Coca Cola or Heinz beans, its supposed to be pure drinking water, and people buy it by the Ocean full

. There are products that do vary from supplier to supplier of course, Coca cola already mentioned and Petrol is another, but the're all out there in the market place looking for that return and doubling up their wares, why should FS be any different ?.
Best
Michael