What really hurt Ford was that from the end of World War I to the end of the 1920’s, GM’s Chevrolet models were roomier, faster and more technologically advanced than the Ford Model T. As such, they became huge bestsellers for anyone that could afford them.
The rise of GM that you described is precisely what brought the original success of the Model T: Ford merely elongated it through his price war. Meanwhile, the car grew old — and by comparison to the competition, bad. In 1908 it was a great, great car for the price. By the 1920s it was merely cheap.
Btw, WWI elongated the reign of the T. The 1919/20 depression that Woodrow Wilson manufactured killed off many auto makers, and helped Ford to consolidate his position. Had WWI not come along, the competition would have beaten down the T much earlier than 1926.