In a world where hard core gamers will pay >$500 for a graphics card, this price will work fine for a 1st gen. It'll be a smaller audience at first but that will also help them out as they need to focus on their customer support for issues they find in the wild.
Except a high quality graphics card will last for years, and has lots of games that will benefit from it.
Almost all serious PC gamers I've ever known upgrade their graphics cards every 9 - 18months. Very few serious gamers keep a gaming rig untouched for 2 years.
Also the comments about a screen or a graphics card being used for more than gaming. Again, sorry, but most hardcore gamers have a gaming rig for gaming, and will use a phone/tablet/laptop for their more casual usage. They generally dislike cluttering up their primary machine with office productivity apps, etc.
It's a false comparison. It's like someone owning a car for track racing, and saying: "yeah, the seats are expensive, but they will be useful when driving down to the shops to pick up some milk". Absurd. Sure, people might drive their road legal track car to a car show, or a garage, or a parts shop, or their friends, from time to time, but that's part of the hobby experience - not used as a justification for the parts/modification.