Like Duff-Man said, we have no idea if Fermi would have performed better on a smaller process, so we really can't slam it for being a bad design.
Hmm, I think even DM believes it will perform better on a smaller process, but that's the problem, Nv are fabless so will never be a generation ahead in process technology.
Cypress was a mediocre unbalanced design as it simply didn't scale well with transistor doubling, it however just happens to look good, because wait for it...
Fermi was a
bad design, bad for the process and bad at graphics,
but good at compute relative to the competition, but that is irrelevant for >95% of us here as we are mostly gamers not crunchers.
GF104 is an improvement with the reduction of non-essential gaming transistors, but it's still behind in efficiency compared to Cypress which itself is not particularly efficient. It is flawed by DESIGN not by the process, what Fermi does in software Cypress does in hardware. Functions implemented in hardware always beat software solutions in performance and power per mm^2. That is a well known fact, and was why Larrabee was hot and failed to be competitive against it's competition that was using fixed function hardware.
Fermi needs some serious improvement in order to avoid a similar repeat of 40nm on 28nm.
To begin with who actually thinks 28nm (TSMC) will be any less leaky than 40nm?
IMHO if Nv wish to create a HPC market, it needs to build dedicated chips, one architecture for computing and another for graphics, not a Jack of all trades, as Jack is going to fail miserably in the trade that matters most to him, his bread and butter.
They tried to do this with GF104 (I don't think I even need to mention GF106), but it still can't compete economically against Cypress in terms of performance/efficiency per mm^2 as it's still a compute chip.
Performance per mm^2 = cost
Power consumption per mm^2 = efficiency
Fermi simply can't compete with the above two factors in the graphics realm, other following architectures will most probably suffer similar fates if they continue in the direction of Fermi, i.e. 'one chip/architecture to do it all' approach.
All in all I find it ironic that the people shooting down DM claiming he doesn't know what he's talking about, citing he isn't an "electrical engineer" (GPU Architect), clearly knows less than he does.