Yeah, in the short term Intel has been able to generate a lot of profit in a short time, but things are going to get very tough for them if they don't start innovating.
Intel has let themselves fall behind as a fab and have allowed their architectural innovations to stagnate as a result. I hope Intel can get their act together and sort themselves out.
It can benefit them a fair bit in short term, having a slower product (which in server space, isn't even the case across the board) which is available today is certainly an advantage.
While Intel says that it's had to double capacity due to record demand, it's worth remembering that Intel now sells 10 core CPUs on the same process where its high end was 4 cores (with the same architecture) just 3 years ago. Even if demand was the same, supplying much larger chips would have required that doubling of capacity.