From the perspective of the late 90's I can see the appeal. Rambus was supposed to be the future. One would think the high latency of the memory would have been more apparent though. And of course RDRAM had its downfall not all that long after. I still have in my collection a Willamette P4 and its RDRAM modules I salvaged from one of those ill fated systems.
I'm not sure how much the Intel IGP held back gaming, best I can remember nobody seriously tried to game on it. Many games outright didn't support the chipset. And those that did didn't work well. For years I gave the advice that gaming meant dedicated video card and the IGP was only good for displaying normal applications. This changed temporarily with the first Iris GPUs in early Core. They were actually competitive with AMD and Nvidia's IGPs at the time. That lasted maybe a year or two.
It quickly became apparent that AGP, even as AGP 8x became a thing, wasn't fast enough to do the job, as every GPU still had tons of VRAM.
So yes, cost cutting due to the desire to dominate the motherboard market, which they did, which led to even more market for their CPUs. Even at the expense of overall graphics software performance for years.