I probably spoke too hastily about TW3 - you're right. It did have some Hairworks performance issues on launch. The tessellation of the hair scaled up to crazy amounts as the camera got closer to it. However, that's because development of TW3 began several years earlier, and it was using an older version of Hairworks. The newer versions don't near-infinitely scale the tessellation like that, and the Hairworks implementation in TW3 does look great now that it's been updated, especially on things like the horse mane, creatures, etc. The HBAO used in TW3, the water tessellation, image reflections, and all that were also great.

As far as Nvidia's business practices... Nvidia developed CUDA acceleration. Only Nvidia GPUs have CUDA cores. Gameworks effects use CUDA acceleration, and CUDA cores. This dramatically improves the performance of any effect using CUDA acceleration, not just Gameworks, but also rendering during development. Unless Nvidia was to give away the rights to CUDA acceleration and allow AMD to integrate CUDA into their own video cards, which they presumably spent a lot of time and money developing, there's no way for AMD to bridge the gap with drivers or software support. They need actual hardware. A software fix would do very little.

Nvidia is faced with the choice to either give away their proprietary technology to their leading competitor, or optimize their effects for their own video cards. Not surprisingly, they chose the second option. Any business would.

AMD's next move should be to develop their own alternative to Nvidia's effects. Nvidia didn't patent scene reflections or dynamic physics. If someone can actually develop something easier to run, easier to implement, or better looking, that works on a range of video cards, I really hope they do. However, they haven't yet, and it's probably because the physical hardware of Nvidia cards allows for CUDA acceleration of tasks that would otherwise be too demanding for any modern GPU. Without CUDA acceleration, games would simply not have things like image reflections, volumetric lighting, or soft body physics very often. The performance cost is just too high without specialized hardware.

Developers always have the option of opting out of CUDA acceleration and Gameworks so that everyone can play the game with the same graphics. However, they opt for Gameworks instead. Whether this is because it's so easy to implement, so easy to run compared to non-CUDA accelerated effects of comparable quality, or another reason, I don't know.

I've worked in the UE4 a limited amount, and all I can really confirm is that Gameworks effects are incredibly easy to implement. It would take me months to do the same thing that I can do in a few hours with Gameworks, and it's free. Not only that, but render times on a fully populated scene change from 3-4 days without CUDA acceleration, to 3-4 hours with CUDA acceleration. This is a lifesaver for independent development.

I don't see Gameworks or Nvidia as anti-consumer, I see it as a way to implement effects that would otherwise be impossible for most games. I also don't think a company should have to give up technology that's head-and-shoulders above the competition.