Hundreds of thousands of people for the first generation.
For a truck, that's pretty lousy. On average, the 1st-gen Avalanche sold 70-75k units per year. The GMT800 Silverado, however, sold
nine times that amount most years. GMT800 Suburbans were selling around 150k annually while Tahoes were at 200k. Obviously, the Avalanche wasn't the money maker of the GMT800 family. Even the Escalade outsold it some years.
The person who wanted the running gear and much better driving manners of a Suburban but at least most of the load ability of a Silverado.
That demographic wasn't large enough apparently based on sales figures.
An Avalanche had a (locking, covered) 5 foot bed that you could occasionally put 8 foot things in so long as they would fit between the wheel wells of a normal truck and through the midgate.
The Silverado 1500 Extended Cab had a wider 8 foot bed with horrible interior utilization while riding worse and being 10 inches longer.
The Silverado 1500HD Crew Cab had a wider 6.5 foot bed that you could not put 8 foot things in at all, while riding much worse and being 10 inches longer.
The Silverado 2500HD Crew Cab had a wider 8 foot bed while riding much
much worse and being
over 2 feet longer.
This seems to be the Avalanche's only advantage over (certain trims) of the Silverado. In my observation at least, it doesn't seem like the typical Silverado buyer seemed to be too bothered by poor interior space and even a lackluster bed. One could buy a Silverado for far cheaper than an Avalanche, which was obviously selling point. GM has basically proven that you couldn't get the best of both worlds here, and no matter what GMT800 truck you bought you'd end up sacrificing something.
And that is why Chevrolet rushed a version with no cladding to the market halfway through the second model year."
I bet it sounds nitpicky saying this, but it still was an ugly duckling.
No, the XUV (an underdeveloped and overly complicated answer to a question that no one asked, as was par for the course for "innovative" ideas with GM at the time) was the pointless one of the two, which is probably why it flopped and was withdrawn after a year on the market. It had the interior space of an Envoy with the footprint of an Envoy XL (which was itself already a questionable design compared to the Tahoe GM already sold) and you paid extra for the pleasure.
I have to disagree here. As complicated and silly as it was, an XUV still seems more useful than an Avalanche. It had the same basic idea (combining the versatility and interior space of an SUV with the bed space of a truck), but was more purposeful. An XUV could be used as a family SUV, while that is not the case for the Avalanche. An enclosed bed made was a plus as well; the XUV could haul good amounts of stuff, yet still look mostly indistinguishable from an Envoy XL. Also, if ride quality and amenities were a priority, the XUV is still the way to go; it drove better, and could be equipped more lavishly than an Avalanche.
If you really want to talk about an extra-pointless GMT800 vehicle, that would be the Escalade EXT.
Nothing more than a standard Avalanche with a more premium badge, better equipment, and a significantly higher price tag. This was
really the answer to the unasked question. The Lincoln Blackwood was comical to begin with, so why on earth would it need a competitor? Also, GM being GM, introduced the Sierra Denali the same year as the EXT, which was obviously the more sensible buy if you really wanted a luxurious truck, which not many people wanted in the first place.
The title of the thread is not "Turbo doesn't understand market conditions of the time periods he calls out cars as being pointless in."
Hence why the title of the thread is, "What cars, in your view, are pointless?".
Whether I have a deep understanding of the early 2000s market conditions or not, the Avalanche wasn't a successful truck.
Imagine one of those coming at you on roads like 
