You kinda answered your own question. Rare's making it because they're the Swiss-Army-Studio: They've made top down racers, 3d kart racers, puzzle games, 3rd person and 1st person shooters, platformers both 2d and 3d, beat'em ups, fighters, action-adventure games, garden sims, they've developed for consoles, handhelds, and digital downloads, and whatever genres Banjo-Kazooie Nuts & Bolts and Blast Corps fit into. The main reason why MS bought Rare was because they could go places none/few other studios have gone before. Every one of their other studios pretty much stick to what they know (with a few exceptions).
Rare's main purpose within MS isn't just to make high quality games, it's to expand the Xbox demographic with the kind of games that MS doesn't have a lot of, like Viva Piñata, Banjo-Kazooie Nuts & Bolts, and now, it would seem, the casual, Avatar stuff and Natal games.