The dinosaur of an architecture that up until late 2020 had higher per core performance, is still close to parity on singlecore with zen 3, and was almost 100% stable on mature firmware? The dinosaur of a process that, with rocket lake, will once again claim the 1st place for single core performance? The single core performance that just happens to be the primary driver of performance for more than 90% of typically used software? Not everyone is a video editor or 3D renderer or Scientist that needs hundreds of threads. Most people use the internet, game, and do basic productivity with their computers. I say this as a student and professional who does actually take advantage of my 16c/32t 5950x, for productivity and gaming.
Don't discount something just because it's not your preferred option. In the same way that scaling works you can make the argument that the introduction of 12 and 16 core SMT ryzen chips on mainstream platforms did little for actual performance, because as you said "scaling begins to fall apart". Applies to high numbers of threads not just high frequencies too, don't forget that.
AMD has had a much easier time of it because all they have to do is make the design of the chip, actual manufacturing is outsourced to TSMC, and all they have to do is focus on manufacturing.
Intel is one of the last companies that has a fully owned chain from design to delivery of product, and yes, that can lead them to be slower with innovation (not always, they have introduced many gamechanging concepts and designs to the world), but it also results in a very well integrated product. Even if you discount the technical advantages of this approach, which obviously have drawbacks too, you have to respect the benefits of that approach both economically and practically.