Question 1: What do they think this demographic wants to read?
Question 3: Why don't they want to pursue other demographics?
What it actually creates is a dire lack of variety. The approach works in some cases such as Batman and Animal Man but applied to the likes of Teen Titans or Blue Beetle it robs those books of their original selling points (fun, in the case of those two examples).
So, Question 2: Why do they want this demographic? Men aged 18 to 35 are the old “Cult TV” demographic beloved of such shows as the X-Files and Sliders. The point of this demographic was that it could support a programme that didn't get good ratings on transmission (and therefore didn't generate advertising revenue) because they had copious disposable income to spend on merchandising.
In either approach we see that TV has got over its tunnel vision to bring sci-fi to the masses.
As Sally quite rightly points out, what DC are basically modelling themselves on is Marvel in the '90s. Marvel in the '90s almost went bankrupt (in fact, I think they briefly were before being bought out) and the era is rightly remembered as being a creative wasteland of repetitive stories that went nowhere.
Which brings us to Question 3 and my complete lack of an answer to it because the idea that any entertainment company doesn't want to expand its audience is completely beyond me. Males age eighteen to thirty-five have been the traditional audience for comics since they became too complex and interlinked to be adequately followed on pocket money (18 – 35 can be most easily defined as “old enough to earn a wage, young enough not to have to spend it on a mortgage”).