I certainly agree with you that as of now, ATI and Nvidia, and Nvidia in particular, produce better graphics cards than Intel does. Intel's cards are only meant for "general workstation" use -- serious 3D requirements mean going with one of the big two.
However, I still can't really understand the argument for keeping these drivers binary. If there is one piece of software that shouldn't be closed source, it's hardware drivers. Keep your DVD player and your desktop software closed, but drivers should be open.
I just shopped around for a laptop, and chose one with an Nvidia chipset because I knew that Nvidia's binary drivers are better than ATI's. (That and, I've always had a better experience with Nvidia cards on my desktop.) My same laptop, however, was offered with the Intel 955 chipset. If I had waited just two weeks to make my order, I would have chosen Intel over Nvidia without question, given this news on their decision to open source. I'm not a Free Software or OSS zealot, and I don't believe software "needs" to be free or any of that garbage. But I do believe that _hardware_ that I purchase (or, as is increasingly the case, am forced to purchase due to lack of choice) should be defined by OPEN standards, and should be supported by OPEN drivers. This is the only way to ensure that my hardware will continue working into the future, even if NVidia dies, and it's the only way for me to know that my operating system of choice (Linux) will always support my hardware of necessity.
A lot of people think the way I do. I won't say millions of people, since most people don't even know what a driver is, nevermind distinguishing between closed and open ones. But definitely a serious number of technologically-savvy individuals want to buy their next computer so that it works with Linux. Even my friend who is a law student and couldn't care less about computers and software, when asking me about my current laptop, said to me, "Do you think that laptop will run Linux properly -- I'm thinking of trying it out." Binary blobs for drivers is one more way to give the average user headaches in an alternative OS.
By the way, the news about ATI is reported here: