Intel's only three generations into on die GPUs - starting with the 32nm Westmere dual core chips.
They don't even have DRAM on the chip yet - normal graphics cards use monstrously high bandwidth connections (10x higher than DDR3) to stream in textures. HD 4000 et al just access main memory, competing with the CPU for bandwidth.
They might be unimpressive now, but it's a focus of Intel to keep improving them, and that will happen significantly faster than Moore's Law.
Also, it's wrong to compare them to discrete graphics cards. They're cheap and low power, used in the MacBook Air. They replace the much inferior Intel integrated graphics and nVidia chipset graphics (used in the original Air).
They're now nipping at the heels of low end discrete graphics chips (especially on laptops). That's a great thing.
As a game developer, I'm excited by them. My games will run badly, but at least now they'll run on even the cheapest computers.