The exact reason why an integrated chip can never function as well as a proper card, regular RAM and CPU's lack the architecture to work as well as a GPU or VRAM.
Look at me, flaunting the limited knowledge of PC workings I have, I feel so smart
Too bad you're wrong. ;o
Even integrated graphics chips are separate processing units from the CPU. They are located on a chip on the motherboard and for some newer CPUs the graphics chip is located on the CPU die. They suck crap mostly because they need to fit graphics processing functionality on a tiny chip while a dedicated graphics card has its own board to work off of. A big reason as to why they are slower is that they use the system RAM which is much much slower to access than the RAM on a graphics card. With that said, you are right that CPUs aren't designed to handle the mass amount of parallel processing that graphics rendering can require.
Integrated graphics are by no means good, but with recent CPUs and motherboards they aren't quite the gaming death sentence they used to be. Recent chips can play many modern games on low-medium settings fairly competently.
