If there was a 1080 level card for £350 it would sell extremely well. At the moment even the 1070 is more than that price due to lack of competition. You forget that the majority of people do not buy £600+ cards.
I think a highend only card will not help AMD gain market share so they need to release competitively priced cards at different tiers, especially the 1070 performance bracket.
They need cards all across the board, you're right, but AMD just as much needs a top tier card that can beat nVidias offering, or be cheaper than nVidia at same perf level to improve it's public image. It doesn't matter if AMD has better cards everywhere except top, cause that's where uninformed buyers look - the top. If nV holds the fastest card, they will most likely buy nV at lower tiers too, because "nVidia is faster".