It's not that simple. If you get more people to upgrade with 100% increase now, what are you going to do when Maxwell launches? That's a reason Intel still won't release a 6-core CPU for $300. To get 50-100% increase would require a much larger die. If HD8970 is just 15% faster, NV has no reason to deliver more than 30-40%. It's enough to make a killing without ruining their margins with a massive die, unless you think people want to buy $800-1000 single-GPUs?
We've already seen Intel execute this strategy perfectly - release very small incremental increases and shrink die sizes to maximize gross margins when there is lack of competition. If AMD graphics follows AMD's CPU path of noncompetitive products, NV will respond accordingly (either raise prices for fastest GPUs as they have done in the past when AMD flopped), or prolong generational increases by giving us enough to warrant upgrades, but not enough to make us skip the next generation. They did exactly that with GTX680. 35% faster was the worst generational increase from NV
ever (GTX580 is not a real new generation from 480 so it doesn't count as a new generation imo).
Think about it, if NV release 40% faster GTX780 and 40% faster Maxwell, a lot of people will upgrade to both. If NV releases 100% faster GTX780, they are going to have less people upgrading for Maxwell. Why would they do that? 15% faster HD8970 is disastrous now. If this is true, NV has even less reason to push a 50-100% faster GTX780.
On the Intel side we have seen mind-blowing slowdown already. Intel used to pump out 2x faster CPUs every 2-2.5 years since late 90s. Since November 2008 when Core i7 920 was $284 and overclocked to 4.0ghz, we hardly moved by 35% at this price in 4 years (4.5 ghz IVB x 15% IPC of SB x 5% IPC of IVB = 5.43ghz Nehalem).
Every time AMD's graphics division flopped, we got rapped by NV.
8800GTX was $599 and 8800GTS 640mb was $449 at launch. NV happily waited
1 year to launch 8800GT. Why? Because they could.
If AMD goes bust, NV and Intel will still launch faster CPUs/GPUs but the pace of innovation will slow down dramatically (well it has already happened for Intel on the CPU side without question), but AMD GPU division wasn't that far behind NV and caught up with HD7000 series.
Without competition in the marketplace, the pace of innovation will slow down and/or prices rise long-term, and ultimately limited choice will hurt consumers. This is why there are rules against monopolies.