The 3700x is $327. The 9900K is $485. There are a whole lot of numbers between those two that can be chosen as a price for a CPU. With the existence of the 3700x, the 3800x makes no sense. If we pretend the 3800x didn't exist, and moved the 3700x to $390, would you have bought the 9900K instead even though it would cost $96 more? If a 20% lower price isn't enough for you to choose AMD, then AMD needs to get out of the consumer CPU business.
You should read how reliance JIO gave 6 months of 4G connection for free with 1GB data per day free in India and grabbed SO MANY MILLIONS of customers away from other providers! what a way to start. And once those customers were hooked to the new service provider, they were hesitant to go back. Sometimes, to change a customer's mindset, its better to pull them in with a discount. I feel after AMD being so low in performance, it was almost like a fresh start for them competing with good performance. I have been INTEL, AMD, AMD, INTEL, INTEL since the last 5 builds and single threaded performance is the most important thing for me. Yet I switched because of the price. Yes, as you truly said, I would have gone with AMD even if the price was a little more, but that would be just you or me and a few more, but not everybody. I have even seen Intel fans make a switch because of this price madness. Now that I have an AM4 motherboard, I might even upgrade to a 4700X if the single core performance is good (another sale for AMD). It also gives them free advertisements. Most of my relatives and friends havent even heard the word AMD. AMD would have considered all these consequences before coming to this price and have their own insider justifications for it.