Die size does matter, but you making some seriously flawed assumptions with your use of die size in comparing the impact on something the size of Cypress versus GF110 (5970 versus GTX 580).
This example I'm using obviously isn't going to be with regards to actual dize size or die size ratios between Cypress and GF110, but...
Lets say you have one die that is 2x the size of another die. And assume that there's no redundancy mechanism for dealing with potential defects.
So only 1 defect is enough to ruin a die. So lets say there's just one defect in the area taking up by the large die. And lets say 2x of the smaller die take up the same wafer area. Only now, only 1 of those smaller dies is defective and the other one is perfectly fine. So 1x failed big die = 1x failed small die and NOT 2x failed die as you are assuming. Already you're getting better yields with the smaller die. This is a very simplistic case, obviously but it's only to prove a point.
As such potential yields for the larger die are going to be far worse than the yields for a smaller die. Hence you'll get more product as a percentage of total wafer size the smaller your dies are. Which is why there's an exponentially higher percentage of dies with defects per wafer the larger your die size is.
Thus on the same wafer with the same number of defects scattered across the wafer, you will almost always get more than 2x the number of smaller dies (that are 1/2 the size of the larger die) versus larger dies.
So in this case. With regards to margins, yields, cost of manufacture, etc. 1x GF100 doesn't equal 2x Cyrpess since on the same wafer in theory you'll get more than 2x good Cypress cores for every 1 GF100 core. The ratio can be adjusted up or down depending on how well you've designed the chip to be tolerant of potential defects.
Regards,
SB