I am 100% pretty sure that 128bit memory controller is the major setback of 4600series. The 4600 series GPU spec is almost the same like the 3800series with some improvement + a half size memory controller which is 128bit. 
I still dont get the idea of this? Pairing 4600series with 256bit could wipe out the 9600GT easily. If it is the cost matter, then at last play with 192bit.

But they could have cut the computational power of  that GPU by may be another 20% which reduce the die size & cost and it wouldnt hurt the performance much as the chip is somewhat bottleneck by the half memory bandwidth.  Unless I am wrong on this.

It wouldn't have worked.
For a single chip in all aspects, ATI couldn't possibly have done a better job unless they had better tech.
This chip by its own merits has done what I've NEVER seen a RM300 card do, and for the professional market (see Press Release of $200 FirePro v3750), makes every professional dude able to really own a workstation card that has 75% of the performance of highend, $1500USD cards.
You have to remember that nVidia at this stage is relying on firesale tactics to actually have their inventory sell, if they wanted reasonable margins (like Malaysian prices, RM400+ 9600GT) the 4670 would have blown its competitors out of the market.

Plus, sooner or later someone will start to use the new 1.2Ghz GDDR3 chips out there, another 20% boost (hello 9600GT!) and you can push it to even more I heard.
p/s: 4670 Crossfire Review. Nice punch, but still 4850's too cheap here. Good if you're planning for the future, though.
http://www.hexus.net/content/item.php?item=15422&page=2

The performance hit is actually smaller than what is suggested, due to the 4850 being bandwidth bottlenecked already at 2Ghz GDDR3. So this is still closer to 8800GTS/8800GTX/9800GTX than 9800GT.

nVidia can't sell any card without dropping prices crazily nowadays. Ouch.