No one manufacturer is busy "smoking" anyone else right now. They are all at a remarkable level of parity. Nikon chooses to put better sensors in lower end cameras sometimes. When the D40 was released, it had a comparably crappy sensor. But when the D90 was released, it was pretty killer, even against the higher end (D300, D2X, etc). The D5100 has the same sensor as the D7000, the D800 seems to be the leader in every category, despite being much cheaper than the D4, etc, etc.
Just because it is in a cheaper model doesn't mean they put a cheap sensor in it. The whole discussion is, frankly, annoying. Every 6 months someone on the internet claims "Nikon is blowing Canon away!" and then 6 months later, someone says "Canon is blowing Nikon away!" It's been going on since Nikon swept up the DSLR market up with the D1 in 2000 and D1H in 2002.