Put simply, why did top Nazis think that they would be better off in a world in which they had eliminated (rather than merely dispossessed and enslaved) Jews?

Well, there wasn't exactly consensus from the start among the Nazi elite that the "Endlösing" meant killing all Jews, and even later in the war you can find some mid ranking Nazis arguing that using Jews as slave labour was more important than extermination due to the pressing nature of the war needs.

Nevertheless, important top leaders like Hitler, Heydrich and Himmler all came to the conclusion that extermination, even if it reduced the Reich's ability to wage war, was the only solution.

I don't think there was a single reason to why, but rather a cluster of reasons. Overall the Nazi regime can be described as a system where the "brakes have been taking off", leading to ever more dramatic and extreme solutions and actions. A "self-extremisation" system so to speak. (See Michael Wildt "Generation des Unbedingten" for self-radicalisation among the RSHA leadership.)

K.A. Schleunes argues in his "The Twisted Road to Auschwitz" that the Nazi systems self-confessed failures in solving the "Jewish problem" by setting up impossible goals, lead exactly to an ever increasing extremism when finding "solutions to the Jewish problem", resulting finally in mass murder as the "Final Solution.

I think there is more or less consensus in modern research, that Holocaust, and the later plans for extermination of even many more millions of Slavic people, wasn't grounded in "real politik", or power politics or economic reasons. But primarily explained by ideological reasons.
Hitler, Himmler etc. really saw it as a race-war, and they were genuinely convinced that Jewish conspiracies conspired against them and Germany.

And since they saw the Jewish danger residing in the "blood" of Jewish people, they saw the danger as incurable. In Nazi optic, it didn't matter if Jew had converted to Christianity, or even born and baptised as a Christian, since the "Jewish blood" was still present.

"Enemies of the State" like communists could be reformed and turned Nazi and was merely a threat to state and system, but "Enemies of the People", like Jews and Slavs, couldn't be reformed, and was an existential threat to the entire German people, far more dangerous than mere Enemies of the State.

With such an ideology, combined ever increasing self-radicalisation, it becomes less bizarre that the Nazi leadership, after failing with legal separation (Nürnberg laws etc.), physical separation (The KZ-system and Ghettoes in Poland), then choose total annihilation.

I think it is important to understand that the top Nazi leadership saw "Holocaust" as an existential racial war, where the danger in loosing wasn't merely the overthrowing of the Nazi regime, or even a humiliating defeat of Germany, but the very existence of the German people.

To put it simplified: one thing was the frontlines on the East and West, but another thing was the internal, ever present frontline and racial battle between "Arian Germans" and "Jews and other Volksfiend".

The extermination of the Jews simply wasn't a sideshow to the war, but perhaps centre of an even more important battle, with far higher stakes.

That is why Nazi leadership didn't see it as diverting important resources from the war, when they enforced their extermination policy despite this meant fewer factory workers working for the Reich etc. They simply prioritised resources to a more important front, so to speak.

While the Nazi policy on extermination baffles rational minds, it makes some sense in the internal Nazi belief-system.

/u/sub200ms has covered the subject extremely well when pointing to cumulative radicalization of Nazi rule and the fact that the Nazis perceived the Holocaust as an existential racial conflict (also, Michael Wildt's book that is available in English is indeed highly recommended).

A couple of things that are worth pointing out in my opinion: Within the logic demonstrated how the Holocaust progressed and was perused, did follow considerations that we, approaching the subject within a different discourse, would identify as "practical". The Holocaust and the persecution of the Jews was a "for profit" venture for the Nazis and while the idea and ideology behind it can not be reduced to mere profit motives, the way the system was set up was indeed one that netted the Nazis more money than it cost them. I go into the specifics in this answer here but rather than the popular picture that emerges often, the Holocaust did contribute financially and in terms of labor force to the German war effort that was crucial in keeping the war going for as long as it did in terms of financing and production capacity.

Related to that and something I go into here and here (with a different interpretation from /u/marisacoulter) is the issue of food in how the Holocaust was executed. German historian Christian Gerlach argues that unlike the decision taken at the Wannsee Conference that the European Jews were to be killed from West to East, the inception of Operation Reinhard, the killing of the Polish Jews in Sobibor, Belzec, and Treblinka, was related to food policy. Gerlach argues that in 1942 the Nazis sped up the killing effort because of potential food shortages and that within the reasoning of those responsible, killing the Eastern European Jews was more expedient for saving foodstuffs for the German populace than the originally agreed plan. This also doesn't imply that food was at the basis of the decision to start killing, only that considerations in terms of how many people the Reich needed to feed influenced certain decisions within the ideological "logic" of having to kill the Jews.

One further historian I want to point you too in terms of understanding the Holocaust and also drawing a connection to other genocides is Dirk Moses, specifically his article Paranoia and Partisanship: Genocide Studies, Holocaust Historiography, and the Apocalyptic Conjuncture and Towards a Critical Theory of Genocide Studies. Some of this I discuss in detail here but the gist is that Moses works on models that aim to unify ideological elements with "real" (as much as ideology is not "real") elements and conflicts leading to theories that aim to take into account the factors you mention above as well as mobilized ideological considerations that are extremely important for other genocides as well.