What do you think the point of Intel's IGP is? Yes, it performs pathetic. Yes, it's dirt cheap compared to buying a real video card. Yes, it does compete with it, on some level. To an end user, the difference between an old low performance video card and a modern IGP is indistinguishable. There is no difference- except for modern top level performance.
So you come from that forum, that explains a lot. The point is it is the exact same situation. To an end user, they don't care if the graphics come from a video card at .28nm .60nm or an IGP. They might care about performance or power consumption, but for most people a computer is a computer and the little parts inside don't really matter at all. If a .28nm video card can be compared to a .32nm video card, I see no reason why you can't compare a video card to an IGP.
AMD already has an x86 license, I don't think Intel can revoke it at will. On the other hand, without AMD computer gaming would go stagnant and die.