I think that ATI/AMD just needed to release this card so they would have something to stand up to the power of the Geforce.
They did succeed in that so it seems, now they have some more time to perfect the architecture.
They did that before, release a card that actually needed a 2nd go at the core and still outperform nVidia.
Look at the 9700pro/9800pro same idea, only they weren't getting as hot ofcourse.
I think that the R600+ or whatever it will be called, will be a good makeover of the R600, with lesser heat and more power.
And truth be said, people that shell out 500+ euros for a videocard are generally not the kind of people that worry about the electrical bill.
And case cooling has become more and more efficient, so the heat the card generates can be dealt with accordingly as well.
And ATI going the way of the emperor?? No, I don't see that happening. ATI may have lost market share, but loads of people know the R600 is coming and are waiting for it so they can buy one, so ATI will get marketshare back, I have no doubt about that.
I seem to recall that the R600 will be produced on 65nm, and will produce less heat and use less power then was 1st thought, cause the original design was based on 80nm core I think.