Exactly, just because there are sensors reporting higher temperatures doesn't necessarily mean the chip is running hotter. Since there are significantly more sensors, it's more likely that there will be a sensor located at the hottest location within the chip, whereas in a GPU with fewer sensors, the reported temperature might not necessarily be from the hottest part, and more guesswork may be involved with knowing how close parts of the chip are actually getting to their limits.
That being said, blower-style coolers like those used on the reference 5700 XT are not what most would consider ideal, but that doesn't really matter much unless one needed one of these cards within their first month or so of release. Most people buy partner cards anyway, which typically have better coolers, and we're starting to see some of those cards now. The Sapphire 5700 XT Pulse that Tom's reviewed the other day kept its temperatures in the 70s during their tests, similar to Nvidia's competing options, while remaining quieter than the reference card.
Actually, these RX 5000-series cards offer similar efficiency to Nvidia's current offerings, drawing a similar amount of power and outputting a similar amount of heat for a given level of performance, at least at reference clocks. Core temperatures do not directly correlate to heat output, and again, it's the blower-style reference cooler that's resulting in these seemingly high core temperatures. Furthermore, the entire point of this type of cooler is that it pushes heat directly out of the case rather than dumping it inside, so while the core temperatures might be higher, case temperatures will be lower.
I suspect Nvidia may once again pull ahead with efficiency when they move to a smaller process node for their next generation of cards, but seeing as they just launched their SUPER refresh, that probably won't be for about another year or so.
I certainly don't see any indication that AMD's graphics cards have "hit a wall", and they apparently have higher-end cards in the works, though they haven't announced when those might be out, and I wouldn't expect them for a number of months. But even the 5700 and 5700 XT are already quite competitive, offering better performance in most current games than similarly-priced models from Nvidia. And even $400 cards are getting into kind of a niche market, with the vast majority of people buying less expensive hardware than that.
My guess is that they will probably fill in their lineup at the more popular price points over the coming months before bringing in anything higher end, which might not be until around the new year. As for where they could go with the higher-end, I could see them taking things in a more Ryzen-like direction, putting multiple modest-sized chips on a card, and having them connected at a low-level to avoid scaling or compatibility issues that multi-GPU setups might normally bring.