While the quality of HBO shows is likely to remain higher than Netflix-sponsored shows for now, the more successful shows that are funded by Netflix the more their user-base will grow due to increasing numbers of subscribers seeking high quality, original programming. Also, Netflix has an advantage over HBO because you can browse through many shows or movies and watch what you want, when you want. HBO does not offer this accommodation and offers less real value (other than high quality programming) for its comparable price.
HBO is an expensive premium cable channel. While it may produce some great shows, it is still available to only a certain group of privileged people. Netflix is far cheaper on a monthly basis and as such more people will be able to subscribe and watch the shows. Like HBO, Netflix has no limitations on what they can show.
I do not think that Netflix can compete with major cable networks, but if they are trying to, then the addition of House of Cards will certainly help. They need a lot more shows like this and be able to premiere new episodes to be able to compete with the rest.
Netflix is trying to do a good thing, I will give them that. Any competition is better than no competition. The fact remains however, that there simply is not enough desire to watch shows like "House of Cards" to take away from the monopoly that HBO and other cable giants have.