If and when the HD 7850 gets to $140 or below, I'm not sure how NVIDIA could respond.
Here the 7850/1G just went pretty cheap now, as in halfway between 6870/560 and 560ti, which all has stayed at the same prices for a looong time.
(6870/560 from 1200dkk, 7850/1G from 1350, 560ti from 1500, 7850/2G from 1600, 7870 from 1900, 660ti from 2300)
But one thing is having GK104 competing with 7850, I really doubt GK107 can reach any higher than 7750, so that's still quite a gap in a high volume segment.