But the Jetta is practically a generic econo-sedan

I beg to differ. Do a vehix.com comparison of a Jetta and two other econo sedans and you'll discover that the Jetta comes with many standard features that are often optional features on the others. Now you don't get these for free and VW aren't known for being the cheapest vehicles, but they are good value and they raise the bar for buyers - there aren't any cheap $12k Jettas.
Add in the fact that Euro is 'in', and that there aren't any cheap Euro cars over here, and you start to see the market - Young image-concious professionals who know value.
But why the Jetta? Why not the Golf? Simple - the Jetta looks larger, which is easier to pitch to the average US consumer. In reality. it may be a inch or so longer at the front end, but they are based on the same chassis and floorplan. Apparently VWOA took a concious decision to push the Jetta to break into the mainstream market. (It worked obviously). Ironically, the Golf has more useable room being a hatchback. (Although the Jetta Wagon beats that..)