Everything you said is true, and Nvidia does know how to run a profitable business. Somehow, they can manage to charge more for lesser-performance cards. The Catalyst drivers really bumped FPS, but AMD really needs to figure out the frame time issues they're having. If they manage to do that, their cards will be both cheaper and better-performing than Nvidia's cards.
And I think what AMD is trying to do with their Gaming Evolved movement is make game devs utilize the computation side of GPU's. Once games can do that then AMD will be fine. I think AMD knows how to run a profitable business, they just need time and space to do so. They're being very strategical about things, while also much improving their cards to boot. I mean, 700 series is still GK104, saf the 780 which is just a cut-down titan. Nvidia is stagnating for a whole nother year. This is why AMD decided not to release 8000 series for desktop, because it'd just be a rebranded 7000. At least AMD is trying to improve and doesn't wanna milk us for more money *cough* Nvidia is the EA of graphics cards *cough*