All I hear is "Intel this"... "Intel that"... AMD does the exact same thing (not to mention the Performance Rating naming scheme).
The "market milking" has a good explanation and it's not related to the evil-ness of a certain company. When you release an entire lineup of products to the public, there is an expectation in the CPU industry that you cover all potential customer's needs (all the market segments, price-wise and performance-wise). You also have to be in-sync with the competing companies and release products that are comparable with theirs (so, we, the little people, can express our apparent freedom and choose what is best for us).
We are one tiny slice of a market segment. We think we need more powerfull processors then anyone else so we're constantly on the "who fries his CPU faster" competition. We also think that we are "the many" but in fact we are "the very few". So there is no point to release something that will only sell in very small quantities for very large sums of money. Money we don't have. So in fact something ultra-high-end like a $2,499.99 4.2 GHz CPU WILL NOT SELL. Especially when you can buy the lowly low-end model for $280.00...
For example, Would you buy the i7 1035 EXTREME @ 4.2 for 2,500 bucks when you can buy for the same amout of money an ultra-high end system with the i7 920 (with a nice aluminum case, TWO GTX295 SLI, high end X58 mobo, big and fast HDD's, juicy KW PSU and still have change for a nice KB+Mouse wireless combo AND A REFRESHING COKE) and OC it to 4.2 with insignificant effort? (if you say yes, you are a liar)
Why wouldn't you buy it? Because they are built on the same tech so their maximum theoretical speed is almost the same. So the 4.2 will OC to 4.6-4.8 and the 2.66 will OC to 4.6-4.8. Funny that.
Another thing is the "moral depreciation" (in my native language its a real term) of a product in time and according to the positioning in the market segment. To follow the same example, if the i7 920 will still be in the market when the 4.2 GHz part will appear, then you cannot sell it anymore for the exact same amout you're selling it now. You'll also have to many products on the market and you don't want that. Because it costs you the exact amount of money to make them, but they will have less and less market value. You see that happening all the time, Intel and AMD slash their prices for products that were on the market for a longer time. But you cannot slash prices indefinetly, so some products will go the to the EOL garbage dump.
Now imagine this process in high speed mode. This is what you are asking for. The result will be bankruptcy. For the companies and for the consumers. Because eighter you'll adapt to the rythm and ask why aren't any 10.8 GHz products on the market and you'll buy every 2-3 moths another CPU (you'll eventually sell your house to get the money for a new CPU), or you'll feel cheated because you paid an insane amount of money ($2.500) on your CPU and now (3 months later) it only costs $250 (only 90%-ish less), just like it happens when a new GPU appears that is usually two times faster then anything before it (like it will happen with the Radeon 5870 or the new nVidia GT300 MONSTER). I am the proud owner of a GTX295 and I have bad dreams about the day GT300 will be benchmarked for the first time.
Ofcourse if a new high end CPU will appear every 3 months, you won't upgrade imediately. You "wait" for the next big thing, because what you have now completely "satisfies" your needs. This is why the companies will go bankrupt. They will spend an insane amount of money on R&D and make very little money in return. It takes a long time to develop new tech, and it takes longer for that tech to pay for itself.
This post is getting too long, I will stop here
I will add this simple question... Do you currently own the i7 975 EE?