AMD hasn't been competitive at the extreme high end for years. The 7900XTX couldn't touch the RTX 4090. What they're stating is with RDNA4 they aren't even going to try to make an RTX 5090 equivalent. They're going to focus on better mid and low range cards to try and recapture a higher percentage of the market.
Here's Gamers Nexus take on it:
https://www.youtube.com/watch?v=N5S_sZbAUxI&t=552s
Steve mentions the RX 580, a mid-range card, which is AMD's most popular card on Steam Hardware Survey. (not including integrated graphics)
https://store.steampowered.com/hwsurvey/videocard/
Ryzen R7 5700X | B550 Gaming X | 2x16GB G.Skill 3600 | Radeon RX 7900XT
Ryzen R7 5700G | B550 Gaming X | 2x8GB G.Skill 4000 | Radeon Vega 8 IGP
Ryzen R5 5600 | B550 Gaming Edge | 4x8GB G.Skill 3600 | Radeon RX 6800XT