Volvo probably knows the large majority of cars they will sell in the US would have all the goodies (sunroof, leather, etc..) The V70 is a luxury car and not really a budget car, therefore making the very base model available but just with very few options like you describe. I'm even suprise they even offer such cars. Imagine if they had to transport by boat from Sweden lots of different color scheme of very base model V70s and not having a sufficient market to maintain that line. On the opposite end, if you notice, the "R" version is available in very limited quantities (7000 or so in North America) and is the most expensive V70 available. Few people can afford it or has a need for this version. But marketing wise, the "R" version makes the other version of the V70 more attractive to consumer (performance and rarety). The "R" attracts the attention but the purchase of most will probably be more set on the other version with simular features (4x4 or fully loaded)

"They make a decent family car but insist on only wanting to import the more expensive luxury configurations"
Any business or manufacturer will sell what consumers are ready to buy as long as there is enough people to buy them. The "niche market" where you fit in is most likely not sufficient enough for Volvo to consider on the V70, leaving this market to other less expensive models like the V40.

If I was the owner of a Volvo dealership, I wouldnt probably order lots of the base models because I would be afraid to get stuck with them. In Europe, the market is probably much different than in the US.
Thats my theory.

I'm 6 foot 2 and I have a sunroof in my 2001, the sunroof actually gives at least half inch more headroom. Whats different on the '04?
JF