I think that as far as aftermarket support goes it's really hard to beat the KLR. A number of vendors (but probably not the Kawi dealer, as you say) sell luggage racks which can be used with Givi cases, aluminum panniers, or soft luggage -- I recently switched from Givis to aluminum panniers. I agree that a steel-braided front brake line ($45) is something you should upgrade to, but few people run oversize rotors. Progressive springs are pretty cheap ($80 for for springs, $80 for shock spring). As for freeway traffic, I normally cruise at ~80 mph with no trouble, even 2 up. A 16-tooth front sprocket ($20) helps, but isn't necessary. Rear wheel horse power for a KLR 650 is in the mid-30s.
I'm not disputing that a KTM will be better off road, a BMW will be better on the highway, and both will have more power than a KLR. The KLR, however, will be better on the highway than the KTM, probably better off road than the BMW, and it will be drastically cheaper than either.
Cheers,
-Lujo
'99 KLR 650