What I hear from my friend who works in the GPU industry, one of the main outcomes from the Larrabee research project was: It is possible to do most of graphical operations on a SIMDed general purpose CPU, with good performance. Everything except texture decoding, which really needs dedicated texture decoding silicon. And with texture units taking up 10% of the silicon, Intel really needs to decide if they want to sell it as a GPU or as a general purpose compute unit with 10% more cores. Intel chose the latter, and you can't really blame them, as you can sell dedicated compute units for more money.
Sony ran into the same problem with the PS3 and the cell. They originally designed it so the game developers could implement whatever rendering method they wanted, in software, on the SPUs. But the performance wasn't high enough, partly due to texture decoding taking up too much time. By the time it was discovered this was a problem, the cell was more or less finalises. Sony were considering adding a second cell to the console, to brute force through the problem, but eventually they asked Nvidia to hack together a traditional GPU.