>I was expecting AMD to blow Nvidia out of the water with a GPU
It's going to be at least a year and more likely 2-3 before AMD can put out a decent consumer card that can really compete with nvidia. AMD can only compete with the compute market, and that is what it's focusing on right now. The VII is simply a tweaked Radeon Instinct, and as such is the most affordable (for AMD) method of offering the prosumer/creator market a card with tremendous capability that isn't at a Radeon Instinct level price point.
AMD has no incentive to try and force nvidia to lower prices, because the average consumer is going to ignore them and buy nvidia cards just like they always do.