radslooking,
The fact is that there are more families than you think who, even when one "describes the situation accurately" still will choose very aggressive management for family members because they couldn't cope with the fact that they didn't "do everything" for said family member, or because they have unrealistic expectations. We see this all the time in internal medicine, particularly in the MICU. Also, people are only paying a fraction of the true costs of their care, so they don't have a financial motive to NOT have us always doing more, doing everything, etc.
There are many families who are very reasonable, but a lot who aren't either. Families and patients don't always make decisions based on logic, since they are in an emotional situation and also many are not scientifically trained and may not even be that educated. You can tell them grandpa, who has end stage COPD and has been intubated twice in the past already, probably isn't going to recover and very unlikely to be weaned from the vent, but all they remember is the two prior times he had pneumonia and later WAS able to come off the vent, so they think, "Why should I believe the doc?". There are those who believe we are not acting in their family member's best interests and do things "just to save money" (i.e. "You would save Uncle Joe but you don't want to spend the money/effort" or "You're treating him differently because of his race", etc.). These situations come up particularly in the hospital, where the docs often don't have a prior relationship with the patient and family. It's a little easier for you to be critical b/c you are in rads...all I'm saying is don't judge too harshly until you've walked in the cardiologists moccasins. Also, there is a lot of difference in quality of life for various dementia patients...I think for some it affects the family's quality of life more than the patient's, at least at first.
I'm not saying the financial incentives aren't screwed up in medicine, just am not convinced you have enough info in the case you are describing to just chalk it up to "greedy cardiologist" or "dumb internist/cardiologist can't explain to the family why medical management would be preferable".