I don't think that's true at all. Let's go back a while.

We had Polaris, a mid range 2016 architecture that was sold for years as a mid range then low end card.

They also had the Vega cards, which were compute-focussed and not particularly great at gaming.

Following that, they had the 5700 series. Decent gaming cards.

After that, the 6000s series. Right up there with Nvidia, and taking into consideration the die size, performance, and comparatively generous VRAM, you could argue they were the better gaming cards, despite losing in RT.

7000s series is pretty much like the 6000 except slightly further behind the 4090, albeit for half the real-world price due to AI demand bringing the already crazy 4090 prices even higher.

Idk to me it seems AMD is more competitive in gaming now than they have been for a long time.

Absolutely, AMD is very focused on Datacenter/AI now. They just presented their next gen AI system MI300X which made AMD stock go up significantly, and on the CPU side their server CPU Epyc is where the big money is at.
That said AMD is still into gaming hardware because they work with both Sony and Microsoft on making new consoles, what we get on the desktop from AMD, is probably mostly derived from that on the GPU side.