If those two people in your example tried as hard to compete with each other as AMD and Nvidia do, then yes, it's a market and it's more healthy than many others.
An unhealthy, uncompetitive market would not have such a notable rate of improvement of the products as we see in the GPU market.
Plus, if it's competition you are concerned about, the situation is improving! Intel is getting into the discrete GPU market too.
> such a notable rate of improvement of the products
To be fair, frames per dollar have been roughly stagnant for a couple of years. It's just that now you have the additional option of paying more dollars to get more frames. This is an unusual situation, but it is what it is. The AMD 7000 series is (so far) not better value than the AMD 6000 series. Same with Nvidia. That's odd.
An unhealthy, uncompetitive market would not have such a notable rate of improvement of the products as we see in the GPU market.
Plus, if it's competition you are concerned about, the situation is improving! Intel is getting into the discrete GPU market too.