I doubt 6900K is going to be £1000 either once AMD have competition out.
It may not come down as much as you think. The reason a top of the line chip like the 6900K is so very, very pricey is for some very sound marketing reasons. There are, broadly speaking, two types of customers. Those who evaluate carefully and want value for money; and those who don't care about the money and buy whatever they feel like. Because of the latter set it makes good sense to have an outlier product or two that is far more expensive than the rest of the range for them to buy.
That's why you keep getting people remarking about how overpriced something is. It's because they're the first type of customer and they expect the price of it to be sanely related to the rest of the range that they're looking at. But it's not for them. It's for the person who just clicks on the most expensive item because it's the most expensive item.
As long as Intel are able to keep the performance crown (which they will for at least the forseeable future), there will be an "overpriced" top of the line product.
In any case, the battle the two companies will really be fighting is in the server market. We have pages of people here arguing about performance (of a chip no independent reviewer can talk about yet, incidentally), but what will make or break AMD is performance per watt.