The SUV exists largely because it didn't originally have the soccer-mom stereotype that the minivan did. The minivan exists because it didn't originally have the soccer-mom stereotype that the station wagon did. SUVs are a shameless attempt by the auto industry to hide poor fuel economy of average vehicles (note that has changed in the time since the inception of the modern SUV).
Arguing that non-"sports" cars shouldn't have powerful engines is easily the most assinine thing I've heard in regards to a station wagon. I suppoe you hate the GTO and every other muscle car of old. You must hate the Mercury Marauder, the old turbo Buicks, the early 90's Impala SS, and other fine performance vehicles. Just because a car doesn't look sporty or even handle great doesn't mean it can't have a nice engine and some balls. I think you'd change your tune if you lined up next to a Magnum SRT-8 and got slaughtered not just out of the hole, but also on the top end.
The Magnum is (in non-SRT trim) going to have either a V6 or a V8 and be available in RWD and AWD (this becomes available for '06 I think). Wagons are making something of a comeback, because people are getting a bit tired of SUVs and minivans (you wouldn't know it by sales, but a lot of the people I've talked to have agreed that SUVs aren't all they're cracked up to be, yet they wouldn't want a minivan). If you need a vehicle that can haul several people comfortably and some cargo as well (and the Mustang certainly can't do this), then what's so wrong with giving it some power as well?