I think we're actually on the same page.
That's why I said 7800GT equivalent. Just like with the 6800GT, I expect NVidia to release an equivalent performance card with a different SKU, priced lower. The 7800GT may stay at $260 or so, just like the 6800GT is still hovering in the upper 200s. But an equivalent card, the 6800GS, is $100 less. I expect a cheaper to make 90nm part, clocked higher, with fewer (16?) pipes. For $200 or less. By Q2, 2006. And if ATI is still targeting the 6600GT rather than the 7800GT as competition for the X1700, they'll wind up with more unsold cores than their current stock of X800s.
Unlike you, I don't expect the 7800GT and x850xt to remain 'high end' cards that justify wallet diarrhea level pricing for more than a few weeks. X850XTs have already moved to the low $200 pricepoint, at multiple etailers. The 7800GT is still justifying a $60-ish premium due to SM3.0, but not for long.
The mainstream video card segment is just too large and too competitive to stay stagnent for as long as it has.