I bet it's cheaper to use GDDR5 than it is to use 256bit for this card. So they decided to go for the GDDR5, buying more reducing the cost of GDDR5, as they need a lot more, more will be produced, moving the market from GDDR3 to 5.
It's a good move. We will see a lot from this little red devil. They might not be as fast as the 295, but they at least produce cards people want to play games on for a price people are willing to pay. Because except for the few elites, who really has 3 or 4 280's or 4870 together and enjoying it. People want 4850's and 9800's because they are affordable and give good performance.
With this card, we will see performance like the 4850 for half the price. What else do you want (yes 295 performance for under 100$ but that will not happen while it's the best card on the block