Driving a 5K display is no small feat. I'd imagine that has a hand in performance issues there. As for the heat, there are a few things to consider:
-AMD has historically never been great about thermally efficient laptop/mobile graphics
-This is only starting to affect the iMac as it gets thinner and thinner (it didn't really start being an issue until the 2009-2011 body style and I can't imagine this retina iMac improves things at all)
-The M295X is, if I'm not mistaken, the most powerful laptop/mobile GPU from AMD that can be put into an iMac at this time. (Which is more to say that a weaker GPU like the M290X probably has slightly less heat generation than the M295X.
I bet there's very few mid-range cards out there that CAN'T drive a 5K display. Apple built a dedicated TCON for the iMac. It just happens to be an AMD card - at least that's how I read into things. It could easily have been a 970/980 Nvidia card, too. As far as Apple not having access to the 970/980 earlier during the design, - let's go back to 2012 when Apple got the absolutely stupendously good GTX 680MX. It was better than anything on the market for laptops by a HUGE margin.
Fast forward to 2014 and we have very, very similar performance from the AMD 295. That's NOT progress. We can kvetch all day and night about what could have/should have happened. I just like to see progress, and aside from the screen in the 5K iMacs, the rest is just either standing still (CPU is already available, RAM I even transplanted from my 2012 iMac! etc), or a step sideways.
I'm so used to Apple innovating, historically, that it really bothers me that they didn't make any major efforts when it comes to the GPU.
I understand that I'm in the minority (potentially), but after having my 2012 iMac running cool/quiet for 2 years, the 5K iMac is nothing special aside from its screen (admittedly a big deal - which is why I "upgraded").
At this point, we can argue all day about this and that, but the FACTS remain:
1.) The 2014 5K iMac runs quite a bit hotter under load than the previous 2013/2012 iMacs. At idle or general web-browsing, they run pretty cool, still.
2.) The fan ramps up almost instantly when you play any games. Diablo 3, for example, on my i7 2012 iMac with GTX 680MX would never ramp my fans up above a whisper in OS X, whereas on the 5K iMac it's almost instant fan noise as the GPU (295) heats up to ~105F. I can't speak for longevity, but this really is not ideal, obviously.
I still love my 5K iMac, and aside from some Yosemite bugs (like getting disconnected from WiFi randomly, which my 2012 Mac mini is now also experiencing since upgrading to Yosemite) the hardware of the system has been running flawlessly.
I suspect the 2015/2016 iMac refresh will be a significant GPU upgrade. Quite frankly it NEEDS to be. The 295 is
POOR. Yes, - POOR. This is NOT an-almost 2015 GPU. In 2012, Apple put a 2013 GPU in their iMacs with the GTX 680MX. I still think they used some sort of sorcery to make that happen with such low heat output in a dramatic redesign of the iMac chassis. In 2014, the M295X is just not good enough. Not. Good. Enough.