Well, it's true that Classical Sanskrit, at least, is a very artificial language, but probably no more than Classical Latin was. From what I've seen of Pali (and that isn't much), it is a different language than Sanskrit, not just a matter of highfalutin vocab and accent. But I'd always assumed that something very close to Vedic Sasnkrit was spoken at one point. It's just that the embalming process of being a liturgical and literary language took its toll on Classical Sasnkrit (the language of say Kalidasa). But Latin was spoken and used as a medium of communication, both in ancient Rome and in medieval Europe. I'd say that Sanskrit served a similar purpose in Hindu India.