I remember the top end cpus only being a few hundred, not $500+ (except the "Extreme" rip off ones)
Look at the performance "gain" from the last few years of intel cpus. its been tiny gains every year even with massive chip size reduction. Hell [H] uses a 3770k for all its testing.
Thats not true at all. There has been 500+ CPU since for a while now. Looking at the original price of the pentium lineup and it was around 700 dollars and this was in 1993. This is way more money considering inflation. Pentium 2 and pentium 3 had similar pricing as well.
AMD hasn't been exerting market pressure on intel at all. More pressure is felt from ARM as things like ipads have been eating into intels low end market.