Example: I bought a AMD 3-core CPU a few years ago for about $120. The passmark score for that CPU is just under 3,000. Today for $120 I can get an AMD FX-6100 for $120 which gets a passmark score of 5,400. So, nearly twice the computing power at the same price.
In another year that FX-6100 will cost considerably less, thus giving the same horsepower for a lower cost.
Race to the bottom does imply making things cheaper but it not necessarily true that it's also worse. The XBOX 360 is now half the price it was when it was first released and yet more reliable and uses less power.
