The AMD products actually perform quite well, I am not sure where you get you information. Also, why do I care if it competes against a 6700k when there is little day to day difference with that except that it cost significantly more. (No, dual cores are not viable for me.) I game at 4k most of the time which means there is almost no difference at those resolutions.
Look at that the other way around, why would anyone upgrade to a new AMD FX processor that is slower than the i5-2500k they bought 5 years ago. AMD is more than 5 years behind Intel in CPU performance. GPU-wise AMD was only a little behind Nvidia before the GTX 1080/1070 launch and they have an opportunity to catch up if Vega can compete with the GTX 1080, sure Nvidia's new HBM Pascal chip will be faster, but it will also be massively expensive. I honestly believe AMD would be better off breaking into 2 divisions CPU and GPU and having the GPU division sell graphics IP designs to anyone who wants to pay for it as well as high-end GPUs. Yes, the CPU division might go out of business, but at least it's not the whole thing.
Also, Intel doesn't really seem to consider AMD to be a big threat anymore, they're much more worried about ARM up-sizing their cores for desktop computers and servers.