I personally believe ATI and NVIDIA should both phase out their old product lines, not slowly but rapidly.
I think both companies are now going to complete product lines instead of new high-end cards filtering down to the low-end over time. nVidia does seem to be the most guilty of the tactic of introducing a high-end product that makes a name for itself, and then introducing a low-end version mostly for OEM use - TNT M64, TNT Vanta, GF2 MX. GF2 MX200. Now the GF4 MX lineup makes that concurrent to the high-end release, and takes advantage of the GF4 name. But the MX440 and 460 are really very capable cards, just not DX8 cards. So they add the MX420, a real dog, that in turn takes advantage of the improved MX reputation provided by those cards.
But the problem described in your article is really an OEM PC manufacturer problem, not a graphics card manufacturer problem, and it arises out of competition and consumer ignorance (the "proc speed is all that matters" thing). Beyond that, the suggestion that the graphics companies would first introduce a cheaper version of new technology makes no sense to me. They want/need to make high margins on the stuff at first, to pay for the R&D, and also need to work out the bugs before the stuff hits the mainstream market. As much as we complain, enthusiasts will and do tolerate the bleeding edge.
nVidia has introduced mainstrean cards as new products this time around with those MX boards. But they aren't really cheap, more than GF2 boards run now. They're reasonably fast, but don't include DX8 stuff, pretty much the same deal as the Radeon 7500. That makes sense to me, because if adding DX8 capability adds cost, then suddenly they aren't budget cards anymore, are they? Why add cost if the benefit today is negligible?
The irony of it all from the game development side is that the best-selling games are the ones that can afford to build in the new features, like Quake3 did with T&L. Then those engines get reused and the feature spreads. But that those games sell so well means they will be run on many PCs that simply don't have the graphics horsepower. So they have to build in the capability to adjust the game to the graphics capability, which they also can afford to do.
I just think that these newest techniques aren't going to be widely adopted by anyone - the PC OEMs, the game developers, so even the graphics companies. But they are cool, so they sell to the high-end and enthusiast market at premium prices, even if they largely go unused except for a few demos. It's just the reality of the thing - the mainstream wants capability for the stuff that's actually out there (DX7 games) but don't want to pay too much, so they give them cards ranging from the 7500 and MX460 down to the GF2 MX and Radeon 7000, and the small enthusiast sector is already tiring of DX8 that hasn't even showed yet and now wants to hear about DX9 hardware instead. The divide goes farther than the hardware itself.
