Because Nvidia has annual revenues in excess of $10 billion (net income over $4b), despite their prices
AMD have been successful with their CPUs because (a) they're good and (b) they engineered a product design that could be easily scaled over the years; the fundamental layout of Intel's Skylake isn't particularly scalable (unless you want CPUs as long as a hot dog). In terms of their GPU redesign, that was very much done because of the consoles - making one chip and selling it in millions over several years is a better deal than aiming for the fickle and uncertain PC market only. Don't get me wrong: Navi is a great design, but it absolutely shouts 'console' (not in any kind of a bad way, though).
Now given that Nvidia's console portfolio consists of their own Shield and the Switch (one a huge seller, the other...umm...not), both of which aren't using anything special, there's no major competition for them or there's no reason for them to try to be competitive here, as AMD have the rest of the console market sewn up. Certainly a new console, especially a super powerful one, is almost certainly going to hit PC and, to a lesser extent, graphics card sales so this is going to something they're keeping their eye on.
But I don't think neither the consoles nor Navi are worrying them too much, even with the relatively weak Turing sales. This is because RTX v2.0 is likely to be significant improvement on what's currently possible, and this is all by design. What better way to make your new product look so much better than its predecessor by having the first release of new technology be a very mixed bag of fortunes (great visuals, awful performance, only works great on really expensive products).
RT cores don't take up a huge amount of die space, less than 10% of an SM's overall area, so increasing the number of them is cheap - especially if you're transitioning to a smaller node. Current GPUs have more than enough compute capability for games, they just need more bandwidth (internally and externally) and a fancy new rendering technology. In previous years, this was hardware TnL, vertex and pixel shaders, tesselation, and so on; now it's all about ray tracing.
And for that, you need specialised ASICs, which of course, Nvidia already has. We know that AMD are following suit in the consoles, so they will in PC models too, as are Intel. Nvidia have a notable head start here, despite the sales and the iffy performance; this is why 'RTX on' has been marketed so much. Keep the consumer's eye on the brand label so that when the new batch of GPUs comes out, more people will assume that only RTX means ray tracing.
I hope you're right, I really do, but I fear that Nvidia fancy themselves a slice of the cake that Apple has made for itself.
