That seems to be a major stumble. Seen a lot of people that really like HFR (as in, omg I need hfr even for work non hfr terrible, etc. etc.) feel that going beyond about 144-165hz really drops off in any appreciable benefit outside VR.
DLSS3 does seem neat, but it seems too limited for many to care much. Needing a $1k+ card to work at all(?), not workable at all on some titles as you really don't want to see it on moving foliage, for the most part it makes latency worse and not better, and works best on boosting games past what most monitors go and what even most hfr fans might care about.
It's cool that it exists, but I'm not sure it's a "killer app" that AMD and Intel will feel compelled to copy like with DLSS2.
I think in general for a really noticeable difference it's doubling of Hz 30 -> 60 -> 120 -> 240 -> 480 -> 960. All of the inbetween are not necessarily big noticeable jumps. A 165 Hz monitor won't necessarily be a huge difference to 120Hz for most people. The other problem is there are a lot of high refresh displays that don't actually have fast enough panels to take advantage of the refresh rate. When you're in 240Hz territory and higher slow pixel transitions can pretty much ruin the experience. It's why first generation 360Hz monitors really weren't worth it compared to really well implemented 240Hz monitors. It'll be the same when 480Hz screens come out compared to 360Hz.
Optimum Tech looks at this in his new benq 360Hz review.
Overall, I think the industry finding ways to make 240 - 960Hz displays more viable without mega computational power is a good thing. I'm hoping that in the future they can remove the cpu even further from rendering, and basically have gpu-driven rendering and maybe generate multiple intermediary frames with neural networks.