The ultra and GTX were so expensive because there was nothing in the market that could even touch them. I don't think ATI was working with Nvidia on that one, I don't see how that can benefit both parties.
Graphics cards cost so much because they are more expensive to make then CPU's. Not only do they have to make the GPU core, they have to make a board for it to go onto. Intel and AMD only have to supply you the CPU and you buy the motherboard seperatly.
Not to mention the huge differences between the two architectures.